Housing Market Has a Way to Go

Has housing stabilized? Maybe in some regards, but it remains to be seen how an additional two to three million foreclosure homes becoming available in 2010 will impact the market. It is unlikely that the new home segment of the market will stabilize until the wave of foreclosures comes to an end, which may well after 2010.

What we may see is the existing home market continuing to slow its decline and going through a broad bottom over the next one to two years, but the new home market may well not bottom for some time.

For new homes, which have a higher cost per square foot, it's all a matter of supply and demand. New homes will continue to face an over supply of existing homes and a weak demand based on price point.

-- Written by John Lounsbury in Clayton, N.C.

At the time of publication, Lounsbury did not hold positions in any of the stock mentioned.

John B. Lounsbury is a financial planner and investment adviser, providing comprehensive financial planning and investment advisory services to a select group of families on a fee-only basis. He worked for 34 years with IBM, and spent 25 years in R&D management and corporate staff positions. He also was a Series 6, 7, 63 licensed representative with a major insurance company brokerage for nine years.

Specific interests include political and economic history and investment strategy analysis. He holds degrees from the University of Vermont, Columbia University and the Illinois Institute of Technology, where he studied chemistry, physics and mathematics. He is a contributor to Seeking Alpha and his own blog, PiedmontHudson.

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