Michigan's slumping housing market likely has "six to nine months" before it hits rock bottom, according to one prominent bank economist.
Carl Tannenbaum, Chief Economist with LaSalle Bank, suggested that Michigan isn't alone in suffering from harsh economic conditions that have led to a national housing correction. But he mentioned that Michigan is probably leading the way.
"The data would suggest that Michigan is fairing worse than the nation," he said. "The average house prices have fallen 4% nationally. In Michigan, that figure is 10% and it's likely to continue."
I wonder if their prediction has anything to do with the fact that the peak of the sub prime arm resetting is due to occur in six to nine months? You think maybe that is just a coincidence?...
Housing Fear is predicting that the real bottom is not going to occur until at least 2010, and anyone who trys to call the bottom at this point is a knife catcher and a moron. A key factor that the "experts" are leaving out is the second wave of Option-Arms that is looming on the horizon. Currently 80% of people with these loans are making only the minimum payment that does not even cover the interest. The principle owed on their loan balance is growing every month due to negative amortization, and almost all of them will lose their house once their mortgage resets.
The only thing that is truly safe to say about rock bottom...you'll know it when we get there.