It will probably be “the middle of next year or well into next year” before any consistent improvement in the US housing crisis, says Steven Preston, secretary of the US Department of Housing and Urban Development.
Mr. Preston noted he is not predicting a resolution to the housing crisis in 2009, just the start of consistent improvement.
“I am looking at that as a period when we begin to see more consistency in buyers coming back into the marketplace, potentially seeing more cities go into the price appreciation column rather than the price decline column,” Preston said, speaking Tuesday at a Monitor-sponsored breakfast for reporters.
“I don’t look at that as being we are through the inventory, vacancy rates are where they were five years ago, and everything is fine again,” he said.
The drop in home prices and sales was a driving force behind the financial crisis that resulted in the bankruptcy of Lehman Brothers, the sale of Merrill Lynch, and the federal takeover of mortgage giants Fannie Mae and Freddie Mac.
The depth of the housing crisis is such that this year there will be between 2 million and 2.5 million home foreclosures in the US, says Preston. Last year there were 1.5 million.
“In a typical year it is 600,000 or so,” he says.
The recovery from the housing crisis in 2009 is likely to be regional in nature, the HUD secretary says.
“The crisis will begin abating in a number of regions of the country. That is what I am hopeful of. But I think it will be more intractable in other regions.” He says “it is going to be some time” before recovery comes to certain communities in California, Florida, Arizona, and Nevada.
Preston says it is “absurd” for critics to blame President Bush for the housing crisis.
“I am not sure how that claim connects with anything specific,” he says.