Orlando Area Real Estate News

According to a new study by SMR Research Corp, specializing in mortgage and home equity loan industry research, the housing market may have hit bottom, setting the stage for a mild housing recovery to begin prior to year-end 2008. The market’s recovery is likely to be gradual, rather than returning to the strong growth seen from 2002 to mid-2006, with house prices merely firming or increasing slightly, the firm said. An SMR study was among the first to declare (in 2002) that a housing price bubble existed, defined as prices rising faster than consumer incomes. In a 2004 study, SMR forecast that a “perfect storm” in credit quality would cause an explosion in foreclosures within two years. “Our prior forecasts were accurate but widely disbelieved when issued,” says SMR President Stuart A. Feldstein. “We similarly expect a skeptical reaction now to a recovery forecast, which is not the common view. But the numbers are what they are.” The new recovery forecast was published within SMR’s annual spring study. “Homes are now affordable again,” Feldstein says. “Consumer psychology is the biggest remaining hurdle to recovery.”

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