Otteau Valuation Group: Housing market expected to hit bottom in fourth quarter, setting stage for recovery in first quarter 2010.The beginning of the end of the housing bust might be around the corner, it appears.
Shares of Red Bank-based Hovnanian Enterprises and other homebuilders have been rising in the past month. Jeffrey Otteau, president of Otteau Valuation Group in East Brunswick, said the strengthening Âis in anticipation of the housing market seeing an improvement sometime within the next 12 months.Â
ÂEssentially, a consensus that is beginning to form that we are getting very close to the end of the troubles in the housing market,Â Otteau said. He said the housing affordability of New Jersey residents is now at 110 percent, meaning they have 10 percent more than needed to buy a house, after falling to 81 percent in June 2006.
Otteau said he expects the housing market to hit bottom Â both home prices and interest rates Â in this yearÂs fourth quarter, setting the stage for a recovery in the first quarter of 2010. ÂAll that is left for the economy is to sort out the job losses,Â he said.
Shares of Hovnanian traded at $1.80 today; they started the year at $1.63 and dropped to 58 cents in early March. Similarly, the shares of Miami-based homebuilder Lennar Corp. rose from $5.87 in mid-February to $9.39 today. DR Horton of Fort Worth, Texas, also strengthened, from $8 to $10 in the past three months.