The University of Central Florida’s Institute for Economic Competitiveness just released their quarterly forecast and predicts a recovery in the real estate market after the first quarter of 2009, but cautions that the fourth quarter of 2008 and the first quarter of 2009 is the Bermuda Triangle. They caution that a lot things have to turn out in this time period for a recovery to happen.
They also predict that housing starts will begin a deliberate climb in 2009, but caution that housing starts will recover to 2002 levels by the year 2011. It sure sounds like we’ve got a long way to go.
Part of the problem with the real estate market is the inventory and reduced housing starts should aid us in the recovery. We also need to sell off much of our resale inventory. Again, it’ll take a while.
It seems like every year, the economists have the same prediction of things improving but I haven’t seen it recently. When Central Florida experienced 3 hurricanes in 2004, every economist predicted a huge downturn in the market. Well, it turned out to be the best market ever seen.
I’m hoping for a recovery in housing like everyone else and predictions for a recovery doesn’t make me feel any better. It’s impossible to time the market and I think it’s a good time to buy with prices at 2004 levels. Just keep in mind that you need to have at least a 5 year time horizon and preferably 10. Even in this awful market, most people who bought homes 8 years ago are still making money on their homes. How’s that to all the bears out there.
download pdf: UCF’s 3Q 2008 Forecast