Two analysts at Goldman Sachs have come up with an economic model that predicts the national S&P/Case-Schiller housing price index will bottom out next summer, though metro-area dives may not pull out until the second half of the year, The Wall Street Journal reports.
Hui Shan and Sven Jari Stehn project that the national index has 2.5 percent to fall before it hits bottom. The index in 20 large cities is likely to fall 3.5 percent before hitting bottom, Alan Zibel writes in the paper.
To crunch the numbers, Zibel said, Hui and Stehn built a new model of prices in 147 U.S. metro areas.
The result is that they project the strongest U.S. markets will be Detroit, Miami and Cleveland, with price increases of 5 percent, 3 percent and 1 percent over the next two years.
"Goldman’s analysts are still bearish on several cities, which they see as overvalued," Zibel wrote, noting that the two say prices in Portland, Ore., should do down by 8 percent over the next two years. They also said New York and Atlanta will lose "at least" 6 percent.
