Forecast Says Real Estate Recovery Not Till 2011

The battered U.S. real estate market will not see better times ahead for a number of years, according to a new forecast by Housing Predictor. The independent real estate web site provides housing market forecasts for more than 250 local housing markets in all 50 states, and regularly tracks housing markets to keep consumers up to date on real estate market trends and issues. Housing Predictor forecasts the markets recovery won't occur until 2011 in the new online report.

Housing Predictor forecast the Federal Reserve’s cut in interest rates this last March and analysts expect

the Fed to continue to cut interest rates in an effort to stabilize the nation’s housing markets and the overall U.S. economy for at least the next year. The Fed must also be keenly aware of the threat of inflation as a result of cuts in the prime rate, considered the chief indicator of mortgage rates. As a result of fall out from the mortgage mess, the forecaster expects a recession to develop, which poses the worst U.S. economic widespread crisis to develop in decades.

The mortgage mess has limited the lending market to mainly those with exceptionally good credit histories and private financing options, which are typically available to only a small handful of borrowers and virtually redesigned the nation’s mortgage lending business. More than 120 mortgage companies and other lenders have either filed bankruptcy or gone out of business all together as a result.

The crisis has sent home prices to lower levels in the majority of housing markets in the nation, and sent jitters across the U.S. economy. Sales activity in the majority of real estate markets has slowed to the lowest level since at least the late 1980's when the Savings and Loan Fraud Crisis reached its peak. However, the strength of the overall U.S. economy and the increasing globalization of the national economy is aiding the economy and may perhaps halt it from falling into a worsening crisis.