NEW YORK (Reuters) – The U.S. housing market slump is nowhere near over and home prices will probably keep falling well into next year, one of the property market’s best-known economists said.
Karl Case, the co-developer of a widely watched gauge of the housing industry, told Reuters that the hard-hit U.S. housing market has gone from being the primary source of the U.S. economic recession to one of its biggest casualties.
“Never say never, but it is looking increasingly probable that we will not see a housing market bottom until next year,” said Case, an economics professor at Wellesley College in Massachusetts.
“If the housing market was independent of the economy, we would be getting closer to a bottom, but that is not the case and we have a horrible economy,” he said in an interview late on Tuesday.
The U.S. has been in recession for more than a year. The fourth quarter showed the biggest economic contraction since 1982.
The Standard and Poor’s S&P/Case-Shiller Home Price Indices, which Case co-developed, has shown an acceleration in the fall-off in home prices in recent months.
Case, whose research has focused on real estate markets and prices for over 20 years, said he did not anticipate the extent of home price depreciation that has transpired since the peak in the second quarter of 2006.
“I did not think it was probable that we would have a home price decline of this magnitude,” he said.
Standard and Poor’s said on Tuesday the S&P/Case-Shiller 20-City Composite Index was down a record 18.5 percent in December, with home prices on a month-over-month basis falling 2.5 percent in December from November, compared with a 2.3 percent decline in the previous period. The 20-city index dates to 2000……
