By Mary Umberger | Tribune staff reporter
September 28, 2007
The deeper America drops into the housing slump, the further out go predictions of when the market will recover.
With new-home sales falling to the slowest pace in seven years, according to data released Thursday, industry sources have started looking to 2009 for an uptick in residential real estate.
Jeffrey Mezger, chief executive of national builder KB Home, on Thursday reported a third-quarter loss of $35.6 million and warned that the housing market will likely get worse, not better, next year.
David Mudd, chief executive of Fannie Mae, told Bloomberg News it could be years before the slump is over.
“I don’t think we hit a bottom until the end of ’08, and then we have some period of time to work our way back up again,” he said.
He joins the chorus of economists and industry experts looking into 2009 or beyond.
“And if that happens, you’re talking about a major recession,” said Hersh Shifrin, professor of finance at Santa Clara University in California, who has studied the effects of psychology on markets. “Housing is that important. It’s a huge component of consumer expenditures. It’s going to have a multiplier effect on the overall economy.”
See the full article here:
http://www.chicagotribune.com/business/chi-fri_housing_0928sep28,0,4930306.story
