Mark Zandi, the chief economist at Moody's economy.com, is known as one of the most visible proponents of active government stimulation of the economy. So, it was with more than a little interest I caught this summary of comments he made to members of the National Association of Home Builders at their annual meeting:
In Zandi’s market recovery timeline, the first quarter of 2009 was most likely the low point for sales; starts will probably bottom-out in the second quarter. Failures of major financial institutions will start to diminish between the third and fourth quarters, and home prices will bottom-out in the fourth quarter of 2009.
“I expect prices to slide sharply, bottom out in the fourth quarter and begin to rise in 2010,” Zandi said. From peak to trough, there will be a 36% decline in prices, and it will be more than a decade before home prices return to the highs recorded during the recent housing boom, he added.
Zandi said he expects foreclosures to peak in the first quarter of 2010 and the jobless rate to peak in the second quarter. The Federal Reserve is likely to tighten the money supply in mid-2010, and a “self-sustaining expansion” should begin in the last quarter of the year, he said.
So, for the record, the housing market was already sorting itself out and beginning to regroup before the stimulus package was passed and the inauguration of President Obama.