Is the Worst Over for the Housing Bust?

Wall Street Journal published an article today indicating "The worst of the housing bust is over, economists said by nearly 2-to-1 (65% versus 35%) in the latest WSJ.com economic forecasting survey. But they still predict that the average selling price of a house will fall next year. The 49 economists responding to the WSJ.com forecasting survey expect home prices to rise 2.8% this year and to fall by 0.5% next year in 2007."

However, it is important to note that the number 0.5% is just a mathematical average among all economist projections and close look at the actual distribution of what the economist projected, price change for the next year could be anywhere from +3% to -3%. Obviously these projections are based on the national economic numbers and local figures will vary depending on our local trends.

I presume these numbers will disappoint those who were expecting a 10-20% bust in housing market, while it will give some relief to many of us who are current home owners that we will not loose too much of our home equity during this transition after all!

Here is the link to the original Wall Street Journal article published on November 20, 2006. You may need a subscription to view the full article: http://online.wsj.com/article_print/SB116370236302025327.html