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Housing market won't stabilize until late 2009, early 2010, economist predicts

The housing market will likely stay sluggish in 2009, experts say, with further declines in the number of sales and prices.

"If the local housing market stabilizes in 2009, it's going to be at the very end of the year," said Coastal Carolina University research economist Don Schunk.

The excess of inventory on the market means that buyers still have the upper hand, and sellers are doing what they can to lure them with price cuts and incentives.

The slowdown will likely be reflected in building permit activity as well, according to Schunk's forecast for the spring quarter - March through May.

Single-family building permits issued on the Grand Strand were expected to be down 47 percent from spring 2007, Schunk's data show. Multi-family building permits should post even steeper declines, falling 71 percent from 2007.

Builders are hesitant to build unless they've already secured a buyer or, in the case of a multi-family project developer, unless they know they can cash flow the property, said Coastal Carolinas Association of Realtors market analyst Tom Maeser.

Mortgage rates are also expected to stay relatively low, Maeser said.

The problem many buyers are encountering, however, is that they can't lock in one of those low rates, Schunk said.

"Yes, mortgage rates are very low, but you still need such a significant down payment to get one of those mortgages," Schunk said. "People don't have enough savings set aside to make one of those down payments."