"The run-up and the run-down in prices in the 2000s didn't do much for average home values while they wreaked havoc on the economy," Blitzer continued.
Then he asked the $64,000 question: "Is buying a home a good idea?"
His answer: "It depends on the economy, the real estate market, and most of all on the needs, desires and finances of the potential buyer."
Needs, desires, and finances, these three, but the greatest of these is . . . well, you fill in the appropriate blank.
Let's look at the components, with the economy first. Joel L. Naroff, of Naroff Economic Advisors in Holland, Bucks County, says 2011 ended on a high note.
"If economic activity is to accelerate, the consumer has to reengage, and that is happening," Naroff said.
"Households are spending money again," he said, and "the comparisons with 2010 numbers were really good."
Consumers were hitting the malls, the Internet, and the auto dealerships, "blowing the dust out of the wallet and opening it up," he said.
Second component: the real estate market.
"Until housing starts to pick up steam and it is a lot easier to get a loan, don't expect robust growth to return," Naroff said.
Based on November's Census Bureau numbers for private residential construction, IHS Global Insight Inc. economists Patrick Newport and Michelle Valverde are projecting modest growth numbers in this category in the first half of 2012, but double-digit growth in the second half.
Spending on multifamily housing had its first gain in three months in November, leading the two to observe that "the recent strong gains . . . start to point to solid increases" throughout the year.
So back to needs, desires, and finances.
