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Friday AM September 11th, 2009

One noted investor and market analyst says improving housing prices are a seasonal balance, and the housing market still hasn’t hit bottom. Ed Mayberry reports.



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 Whitney Tilson photoAuthor and Tilson Mutual Funds managing partner Whitney Tilson says Texas home prices didn’t spiral out of control as in some other markets.  But he says the housing crisis still has at least another year to run.

“The bubble here was not as great and therefore the aftermath will not be as painful.  That said, we’re still in a terrible economy.  Unemployment is high and will likely remain high, maybe even rise a little bit from here.  We’ve got to hope that interest rates don’t go up.  That could throw a real monkey wrench into the housing market.  So, it doesn’t surprise me at all that the data actually, it looks pretty good in Houston and in Texas in general because, you know, it wasn’t one of the bubble states.”

Tilson says people are making mistaken assumptions about improved home prices from April, May and June data.  He says those months traditionally are the strongest times for home sales. 

“It’s going to be sort of a long, grinding recession in all likelihood–in part, Ed, driven by the aftermath of the greatest asset bubble in history.  Does that mean that you just stick all your money in a mattress?  That answer to that is no, there are still investment opportunities out there for savvy investors.  Home prices are likely to start declining again, and probably won’t bottom for another year.”

Tilson, who recently published More Mortgage Meltdown: 6 Ways to Profit in These Bad Times, is a frequent guest on CNBC, Bloomberg TV, and writes for Web sites such as the Financial Times, Kiplinger, Forbes, Motley Fool and others.  Tilson spoke with current and prospective investors of Tilson Mutual Funds — he’s a managing partner — at a dinner yesterday at Arturo’s Italiano on Uptown Park Boulevard. 

Ed Mayberry, KUHF Houston Public Radio News.