WSJ lays out the case for homeownership

I blogged back towards the end of May that the Economist Magazine had called the bottom of the housing market.  Well the Wall Street Journal is now getting in on the act.  They published THIS ARTICLE over the weekend in which they spelled out the case for home-ownership.  They point out that the buyers need to have a long-term outlook for owning the home which is an important point.  No one expects the housing recovery to be swift.  Furthermore, its always the case with home-ownership that a home is not extremely liquid, transaction costs are fairly high, and typically home-owners will have leverage.  All three factors means that if you buy a home you should plan on holding it for a while.

Here are some excerpts from the article:

*”According to Moody’s Analytics, the ratio of home prices to income is now 20.9% lower than the 15-year average through 2010, and 12.5% lower than the 1989-2004 average.”

*”While overall home prices fell by 7.5% in April over the same period a year earlier, according to CoreLogic, a Santa Ana, Calif., provider of real-estate data and analytics, if you exclude distressed sales, prices were off just 0.5%. So if you are in a market that isn’t battered by foreclosures, you may be close to a bottom already.”

*”Moody’s Analytics predicts that the number of distressed sales will begin to fall in 2013, and that prices will begin to edge upward then.”