Still Optimistic About a Turnaround in the Housing Market in the Next Six Months?

My friends at Calculated Risk obtained a housing sales forecast from Goldman Sachs that is beginning to look a little more realistic. GS is predicting a Case-Shiller housing price index decline in 2007 and 2008 of 7% each year. Also they are forecasting a decline in sales 13% in 2007 and 15% in 2008. Too bad the forecast did not contain some type of inventory forecast as well.

One thing I was confused about was the difference between new home sales and new housing starts. It looks like starts can be twice as much as sales in some quarters.

They did not forecast out past 2008. Probably because the crystal ball starts getting pretty cloudy out that far because other factors come into play such as economic growth, income growth, interest rates, conition of the capital markets, etc. Or maybe they stopped at 2008 because there is a limit to the amount of depressing news one can take at a time.