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Housing Not "Bottoming," Says Tilson: Another 10%-15% Drop To Go

Posted May 26, 2009 01:54pm EDT by Henry Blodget

There has been a lot of talk lately about a "bottom" in the housing crash, but it's balderdash.  As the Case Shiller index confirmed this morning, house prices are still plunging at a 19% year-over-year rate.  This is only slightly lower than the record drop of a couple of months ago, and it shows that housing won't "bottom" for a quite a while.

The good news, says our guest Whitney Tilson, managing partner at T2 Partners and author of More Mortgage Meltdown: 6 Ways To Profit In These Bad Times, is that house prices will probably only fall another 10%-15%, which means we're closer to the end than the beginning.

Whitney thinks the market will bottom in about another year.  Don't expect a quick rebound, however.  Housing market bottoms don't tend to be "v-shaped."  And there's just too much baggage in the form of over-supply, consumer debt, and ongoing economic weakness to expect a rapid recovery in house prices.

See Also:

House Prices On Track To Fall Another 10%-15%

House Prices Finally Approaching Fair Value

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