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Focus tonight our nation's housing market have we hit bottom well according to Barron's recent cover story we have and things are -- -- up.
As much as 7%.
For prices but just how soon and where.
Let's talk to Michael Santelli.
Parents senior editor Michael it's great to have you here Ari what is the analysis.
-- -- that leads you to this prognostication because we still have doubters.
We do and probably rightly so obviously it's been not many people tried to call the bottom of the housing market and that 7% by the way is a cumulative over the next three years so really what we are saying -- the what the numbers show us.
Is that we've stabilized and in you know some of the market -- hardest hit in fact might spring back the most like Phoenix.
Really it's based on a few things the average incomes personal and comes in in each individual metro market.
And the affordability of homes in those markets plus.
And -- of housing price I'm sort of sorry housing permit data so essentially to supply demand.
Story in individual markets not nationwide but it's totally dependent on what happens to employment right.
Well in terms of whether we get to that 7% or even go beyond that it is based on employment and to me the reason for that is.
Not just that houses are affordable now based on what you could otherwise ran for what interest rates look like but what -- you can qualify.
What do you can qualify for these cheap mortgages -- is all about whether the employment situation improves or not.
Absolutely right let's look at places with the biggest -- this is the payoff is this what I -- -- -- to get Phoenix which was.
In desperate talking with its Gannett pop -- Denver had a huge foreclosure problem Austin which is.
Haven't done well the whole way out right yes but people love that city and -- actually -- -- smartest general Austin Houston even Dallas looks look like they're they're pretty sure sturdy right.
A -- -- are we talking about there.
At the very -- -- start my -- you might be looking at twenty to 25% over three years now can offer very depressed base that cited are gonna get you anywhere near where prices and that's in that market war.
Five and seven years they've fallen fifty or 60% -- -- -- they've had a huge plummet -- if you are looking for opportunity out there people.
Are these housing markets with the smallest gains that's perfect Atlanta Detroit.
Detroit isn't -- -- it is obviously it's a -- its decisions been hollowed out by -- population.
Detroit Cleveland a lot of those old industrial cities but simply just not going to have the population growth -- income growth really to support.
Higher housing prices but even there we're not seeing forecast major declines just that it's gonna kind of -- -- You know even one of the experts I spoke to says there could be as much as -- 10% gain and I've been saying for some time when this thing turns.
It's really gonna turn and you're gonna wish.
That you would then and the Smart chances are and part of that is because we have some tremendous should have some tremendous pent up demand for new homes right.
You have had this real depletion of new household formation of people doubling up and all the rest of the -- mom and dad and once he gets moving as you know most the down payments are made down payments.
Are created when you sell a home so what you're able to sell the when you're sitting on.
It it obviously has a little bit and went momentum affect.
To create future cells I wondered -- if at some point the banks are gonna get a little looser.
With their standards -- they will hand out -- to.
Yeah you wonder about that I mean they obviously the biggest banks are dealing with still the backlog.
Not just foreclosures -- potential foreclosures but also the put back some you know basically they're still cleaning up the mess but I do think that we've seen the worst in terms of tightening of lending standards that's exciting alright Mike -- -- To cover Barron's great story this week.
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