Pittsburgh Homes Daily

I’ve been hearing increasing speculation in the media that the nation’s housing market is at or near the bottom. Upon reading this interview, I (along with many other people) am wondering how long it will take for the real estate market to return to housing prices of Fall 2005 / Spring 2006 once it hits the bottom.

Susan Wachter, a professor at the Wharton School of Business, said:

WACHTER: Well, it is not going to be a bounce to the upside. This is going to be a sharp decline still to come, how sharp depends on the overall economy, and then the rise unfortunately will be slow. We could be two years out, three years out before we are back to the previous highs.

Something seems to be wrong with that statement. I can’t believe that a slow rise in prices would only take two or three years to get back to the housing market top. If real estate prices are down an average of 10-15% from the market high, and her statement that another 5-10% decrease is likely is true, then that would be a pretty significant recovery bounce to the upside.

What do you think? Will massive real estate speculation plus pent up buyer demand cause a significant bounce at the bottom or will the credit crunch, market pessimism, and a poor economy leave prices stagnant?