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Expert Predicts Housing Market Bottom Next Year

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May 1, 2008 6:23 am US/Mountain

Expert Predicts Housing Market Bottom Next Year

Good Question: When Will Things Get Better?

Reporting
Alan Gionet
DENVER (CBS4) ― "I think it's terrible," said a man in Green Valley Ranch.

The foreclosure rate there shows it's the worst area of Denver. People know it and are feeling it.

"Yeah, I want to move," says another homeowner.

But with so many bank owned homes, the market is so soft.

"There's no way possible that I could do this," says the man.

But somewhere out there is a bottom to the housing market.

"The best way to look at this is that we know we're going to come out of this eventually," says John Covert of Greenwood Village based Metrostudy.

The Denver metro area is as diverse as any in the country when it comes to how housing is doing. Places like Greeley and Green Valley Ranch are caught in the foreclosure hole. The walls to climb out are steep. Other areas, like high priced homes and choice neighborhoods are not falling at all - even rising.

Builders are a good gauge on what's ahead. Right now, housing starts are way off the pace of the past few years, but they may drop to their lowest point this year.

"Basically they're not starting a house unless it's sold," says Covert. "The problem is that there's so much resale inventory in the market right now that people can't sell their house to buy a new house. So builders are left with a lot of canceled contracts and trying to manage that whole scenario as well."

Covert believes later this year, data will show builders it's time to gear up again.

"We'll get to a point where we'll just have to build more homes, especially if we're creating the same number of jobs and the same number of people outside the market into Denver."

Denver's relatively strong economy is the lubricant he believes in building. If people are still moving into the area, there will be housing demand.

And what about existing housing? How far will we fall? Not as far as other areas, where values that climbed rapidly, are falling rapidly.

"I think overall we're going to see a negative price appreciation for 2008 in Denver, but it's going to be single digits as opposed to Phoenix or Vegas where there are 15, 20 30 percent declines," Covert said.

But in areas like Green Valley Ranch it will take longer. The foreclosure crisis has legs in many areas like that.

"And that's going to be with us all the way, we think through the first quarter of 2009," Covert said.

That means the beginning of what many hope will be the end.

"I'm just going to have to go with the flow right now," says the man in Green Valley Ranch.

(© MMIX CBS Television Stations, Inc. All Rights Reserved. This material may not be published, broadcast, rewritten, or redistributed.)

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