Industry News

‘Soft landing’ for housing ‘no longer in the cards’

But economists say downswing will not drag economy into recession

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The housing market downturn looks rougher than the soft landing housing analysts had been expecting, but some economists are saying the downswing will unlikely lead the economy into recession. Historically low interest rates, an overall economy that is still pushing forward, and efforts by the nation's home builders to control their unsold inventories will keep the real estate slowdown from causing a recession, according to economists participating in a teleconference last week hosted by the National Association of Home Builders trade group. NAHB Chief Economist David Seiders said that he is forecasting an 11.5 percent decline in housing starts this year, followed by another 11.7 percent drop in 2007. Housing should hit bottom by the middle of next year, and will be approaching a demographically based trend production level of about 2 million units in 2008 (including manufactured homes). Following an unsustainable boom in housing starts, sales and price appreciation in 2004 and 2005, ...