One Housing Analyst Believes Housing Prices Are Close to Bottom
One Housing Analyst Believes Housing Prices Are Close to
Bottom
The recent stream of disappointing data on the U.S. housing market has many analysts spewing warnings of a double-dip in prices and talk of years of recovery before the market stabilizes. But one analyst says that if the data are looked a more closely it could be ascertained that prices are nearing a bottom, and things aren't quite as bad as a quick look would indicate.
“The decline is mainly because the mix of homes sold has changed in favor of distressed sales, which typically sell with a 'foreclosure discount.' Non-distressed properties (sold by voluntary sellers) have already started to stabilize,” explained Ajay Rajadhyaksha, who manages U.S. fixed income strategy at Barclays Capital.
“As voluntary sales pick up in the summer, the mix of homes should change again in the next few months, in favor of non-distressed sales. As a result, the aggregate index of home prices should stop declining and could even go up,” the housing analyst added. Rajadhyaksha steadfastly dismisses speculation that recent price drops are a sign of a double-dip in prices and feels that national prices have reached a point of minimizing downside risk of real estate investment.
“For investors who look to the home price indices for clues to the macro-economy, we recommend focusing on the index of voluntary sales, since non-distressed borrowers will increasingly determine the true health of the housing market,” he wrote. “This index has held up reasonably well and suggests that prices are stabilizing. In sum, there are many reasons to worry about the US macroeconomic picture (the recent softening in the labor market, the US fiscal picture, etc.) but the recent drop in US home prices should not be one of them,” he added.
Rajadhyaksha's comments were published in a research note on Friday.
The recent stream of disappointing data on the U.S. housing market has many analysts spewing warnings of a double-dip in prices and talk of years of recovery before the market stabilizes. But one analyst says that if the data are looked a more closely it could be ascertained that prices are nearing a bottom, and things aren't quite as bad as a quick look would indicate.
“The decline is mainly because the mix of homes sold has changed in favor of distressed sales, which typically sell with a 'foreclosure discount.' Non-distressed properties (sold by voluntary sellers) have already started to stabilize,” explained Ajay Rajadhyaksha, who manages U.S. fixed income strategy at Barclays Capital.
“As voluntary sales pick up in the summer, the mix of homes should change again in the next few months, in favor of non-distressed sales. As a result, the aggregate index of home prices should stop declining and could even go up,” the housing analyst added. Rajadhyaksha steadfastly dismisses speculation that recent price drops are a sign of a double-dip in prices and feels that national prices have reached a point of minimizing downside risk of real estate investment.
“For investors who look to the home price indices for clues to the macro-economy, we recommend focusing on the index of voluntary sales, since non-distressed borrowers will increasingly determine the true health of the housing market,” he wrote. “This index has held up reasonably well and suggests that prices are stabilizing. In sum, there are many reasons to worry about the US macroeconomic picture (the recent softening in the labor market, the US fiscal picture, etc.) but the recent drop in US home prices should not be one of them,” he added.
Rajadhyaksha's comments were published in a research note on Friday.
Comments
Top Stories
Latest DT's
-
1 month ago by Geno -
1 month ago by dallaseste
-
2 months ago by Geno
-
2 months ago by Geno
-
2 months ago by Geno
-
2 months ago by Geno
-
2 months ago by Geno
-
2 months ago by Geno
-
2 months ago by dallaseste
Top Authors
Subscribe
Games
Alias
3 Foot Ninja 2
ALIAS 2
Air Dodge
Battle Tanks
Bomber Bob
Cable Capers
Gem Mania
Hacker
Hostile Skies
Mission Mars
Bowling
Samurai Warrior
The Pharoh's Tomb
Monkey Lander
Muay Thai
Action
Donkey Kong Banana Barrage
501 Dart Challenge
Rooftop Skater
Zelda
Donkey Kong
Xtreme Pinball
Tetris
Connect 4
Battleships
Frogger
Penguin Push
Online Video Poker
Spank The Monkey
Mob Pay Back
Dealer
Yeti Sports Seal Bounce
Hold Your Drink Steady
Solitaire
Canyon Glider
3D Sudoku
Metal Slug Rampage
Street Fighter II
Flashman
Disc Golf
Table Tennis
Ninja Air Combat
Celebrity Hitman Terrorist Alert
Spider Solitaire
Tubin
Presidential Knockout
Global Player
Ma Balls
Baseball
Beckham Fit
0 Comments
Click here to sign up now.