A Look Back at What Went Wrong in 2007

Experts thought 2007 would bring a real estate recovery – not the worst collapse on record.  What does that say about forecasts of a turnaround in 2008?

A year ago at this time many top economists were looking for a recovery in the housing market to begin in 2007.  Instead, the year saw historic declines in nearly every measure of housing strength and home building, and left a trail of predictions from some of the nation’s top economists that look – at best – foolish.

So what went wrong in 2007 that prevented a turnaround in the housing sector as everyone predicted?

Rising mortgage delinquencies and defaults led to a meltdown in the mortgage market, cutting off credit to many homeowners and potential buyers and sparking record levels of foreclosures.  That only added to a record glut of both new and existing homes on the market.  Historic declines in both the pace and price of home sales soon followed.

Many economists freely admit their year-ago forecasts missed the mark.  And while many of those economists are again hoping the year ahead will bring a modest recovery, they are far from certain.

We’d love to hear your opinion.  Do you think 2008 will be the year of housing recovery, or will it linger on into yet another year?  Post your comments below.  Your email address will not be published!