Housing Market to Stabilize in 2010: Report

While some economists are concerned about the possibility of an ongoing housing market downturn in 2010, one new report finds that increased home affordability and government incentives will help stabilize the housing market in the coming year.

The RPX Monthly Housing Market Report, released by real estate data and analytics company Radar Logic, contends that household incomes also will stabilize after unemployment peaks in the second or third quarter. Banks and financial institutions holding onto the backlog of distressed properties are expected to release them back into the market gradually, so the homes will be absorbed without drastically reducing prices.

“If efforts to ease foreclosure can and do succeed, there could be significant recovery in housing values in 2010,” says Michael Feder, President and CEO of Radar Logic. “Inventories are close to the norm of six months’ supply and prices have returned to 2003/2004 levels. Activity is much stronger than normal for this time of year, and there is evidence of qualified buyers waiting on the sidelines. If we can put an end to the financially-driven weakness, it may well be time for housing values to go up,” Feder says.