Is the current economic slowdown making the housing market worse?
Yes. But it’s important to note that nationwide housing prices started to decline after peaking in the summer of 2006 — before the rest of the U.S. economy began sputtering. Indeed, the bursting of the housing bubble was a major factor in the country’s economic slowdown. Now that the slowdown is in full swing, it’s likely to further weigh down the housing market. Baker says that larger-than-average job losses in any region will “further weaken the housing market and prolong the downturn there.” Mike Shedlock, an investment adviser for SitkaPacific Capital Management and the blogger behind Mish’s Global Economic Trend Analysis, says he, too, is concerned about negative job reports: “More people out of work is going to put more pressure on people being able to pay their mortgages. So, that’s going to lead to more foreclosures [and] more people walking away from their houses.” How do I know when the market has hit bottom? “Nationally, we’re very, very far from any bottom,” says Baker, who
