JEREMY HOBSON: A report out this morning from the real estate website Zillow.com says home prices fell 3 percent last quarter. And some economists are worried this means the housing market hasn’t yet hit the bottom.
Let’s get reaction now from Julia Coronado she’s chief economist with the investment bank BNP Paribas. She’s with us live as she is each Monday. Good morning.
JULIA CORONADO: Good morning.
HOBSON: Well, it seems like economists are really having to keep re-adjusting their predictions for the housing market each time we get bad news like this.
CORONADO: Yes, housing has been a consistent disappointment throughout the recovery. And what it appears is that there really has been a structural change in housing demand. So for example, we see younger people putting off that first decision to buy a home later and later, delaying it later and later. We’re seeing more college students living at home with their parents during college. And these changes have proved to be pretty lasting so the taste for home ownership is a lot lower than it used to be.
HOBSON: Well, what’s you’re current forecast and what do you think it’s going to take to get the housing market turned around?
CORONADO: Well I think unfortunately given the tremendous amount of supply that we still have coming onto the market from the foreclosed properties and from people who delayed selling their home as they tried to wait out the market will really continue to put downward pressure on prices. So I think we’re going to continue to see these moderate declines throughout this year and then perhaps by the end of the year we’ll be at a new true equilibrium for home prices.
HOBSON: Julia Coronado, chief economist with the investment bank BNP Paribas, thanks so much.
CORONADO: My pleasure.
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