by Calculated Risk on 12/14/2007 02:11:00 PM

From Bloomberg: Housing Crash Deepens in 2008 as U.S. Realtors See Record Drop

Analysts at New York-based CreditSights Inc. predict housing won't rebound until ``2009, at best.'' Moody's Economy.com Inc., the economic forecasting unit of Moody's Corp. in New York, says home sales will hit bottom next year, declining 40 percent from their peak.

The peak for existing home sales was 7.076 million in 2005. So 40% off the peak would be 4.246 million units next year.

And from AP: Fannie CEO: housing trouble until 2009

Fannie Mae's CEO [Daniel Mudd] told shareholders Friday he does not expect a housing market recovery until late 2009, "at the earliest" ...

OK, not a specific 2008 forecast, but still interesting.

Here are a few other forecasts:

NAR, Dec 2007:

Existing-home sales are likely to total 5.67 million this year, the fifth highest on record, rising to 5.70 million in 2008, in contrast with 6.48 million in 2006.

From AP:

Patrick Newport, an economist at Global Insight, forecasts that home sales will drop from 5.66 million this year to 4.7 million in 2008

Back in August, Goldman Sachs forecast existing home sales would fall to 4.9 million in 2008. However, since then, Goldman has becoming even more bearish on housing.

To put these numbers in perspective:

Click on graph for larger image.

This graph shows sales as a percent of total owner occupied units. This is a measure of turnover of existing homes.

It appears sales in 2007 will come in at about 7.5% of owner occupied units, well above the long term median of 6%. If sales fall back to the median level, sales will be around 4.5 million in 2008. Note also that usually sales fall below the median level during a housing slowdown.

Here is a table of a few existing home sales forecasts:

Forecaster	Units	Percent of Owner Occupied Units
National Association of Realtors	5.7 million	7.5%
Goldman Sachs (August)	4.9 million	6.5%
Global Insights	4.7 million	6.2%
Moody's Economy.com	4.25 million	5.6%

I'll try to forecast 2008 sales at the end of the year.