2007 brought the worst housing collapse on record. Will it turnaround in 2008?

I think it will take at least until 2009 to BEGIN to turnaround.

Here's why
- There is a tremendous amount of inventory that has to be absorbed. Builders in certain areas (ie, Florida, Vegas, Cali) were putting up condos at lightning speed. They arent selling despite incentives from builders.
- The banks are scrutinizing loan applications very closely. A year or so ago, you could buy a house with little to no money down, no income verification, etc
- Even though the Fed has cut interest rates, the LIBOR rate which is what most mortgages are tied to havent budged.
- There is a model to housing. First time buyers (newlyweds)eventually are ready to move up to their second home with the birth of a child. The 2nd home owners are ready to move up to their even larger home (now that kids are older and need privacy), and the cycle continues. Since the sub-prime debacle, first time home buyers are not able to buy unless they have 10% down payment (in some places 20%), a FICO score of 700 or better, and low debt to income ratio. That stagnates the sale of the houses up-cycle since there are few buyers for the first home.

I also dont think the government can affect this market very much (other than continued interest rate cuts), and with no clear leader from either party emerging for the Presidential election, there is nervousness in the financial markets. Couple that with banks having to write off huge losses and you have the Perfect Storm.

It will recover, but it will need more than 12 more months to get there.

ED

The answer is no. The banks are still reporting foreclosures and the credit market as a whole is bad.
What makes this worst is that it will effect businesses from borrowing which will lead to a full blown recession-don't believe the king that wears no clothes that the economy is great.

I think it'll START to turn around in '08. My biggest thing is that the Election will be the turning point. Many people will say that the market is bad now, but they're just parroting what the media is saying. They don't know. Most people are clueless when it comes to economics and finances.

My feeling is that the removal of G.W. Bush from the White House in November is going to be such a boost to the morale of some people and when combined with the relief that the bickering over him will stop, the mentality of the state of the Country will shift to a more positive outlook. When people are happy, they spend money.

It's all about psychology in my opinion. If you were to go out today and tell the world that the real estate market is back in full swing in the US, and had some authoritative figure to back up your claim, the people in this country would go, "well, that's that. Let's go buy that home."

I don't think it's a lack of money, it's a lack of comfort in spending that money. People still want to buy homes, but the media tells them not too. They're not losing their interest, they're just postponing. When election time rolls around, the media will drop the economy and housing market as their top stories, and will focus 100% on the election.

When the turn-around hits, they'll combine with those actively seeking homes, and we'll be right back in the black.

No, it will not turn around in 2008. If you mean will we be back to a period of rampant speculation as took place a few years back, hardly. You should bear in mind that a law change in 1974 affected us all and it dealt with how our retirements are handled. The dollar is dropping in value, the boomers are coming, gas prices on the rise. Credit card debt at record highs, payments late, buckle up your chin strap, my opinion.