Friday, September 11, 2009

Whitney: Home prices to fall another 25%

Star bank analyst Meredith Whitney predicts home prices will fall by a quarter from current levels:
Home prices in the US could fall by another 25 percent because of high unemployment and another leg down will come for stocks, banking analyst Meredith Whitney told CNBC Thursday.

"No bank underwrote a loan with 10 percent unemployment on the horizon," Whitney said. "I think there is no doubt that home prices will go down dramatically from here, it's just a question of when."

Local governments and states are chronically under-funded and "most states are under water," adding to the problem of low private consumption, she said.

"If you look at the drivers for unemployment I don't see that reversing very soon," Whitney said.
Posted by at 10:53 AM
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21 comments:

  1. AnonymousSeptember 11, 2009 11:36 AM

    Prices won't fall further here in the DC area. THE AREA IS DIFFERENT FROM THE REST OF THE WORLD! We eat, sleep and exercise differently than others. We are more intelligent than others. Sure we have lost more than 20,000 jobs and population growth has descreased. But this DC! Home of the brave and all of that. No way will prices fall here!

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  2. AnonymousSeptember 11, 2009 2:07 PM

    big time ouchies!

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  3. AnonymousSeptember 11, 2009 3:20 PM

    DC area houses will fall another 50%

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  4. AnonymousSeptember 12, 2009 10:17 AM

    I can't wait to see the REC shrink in NOVA. The assessments on structures is well over 2.5x the cost to build them. I like the sacramento NAR report which breaks out the tranactions. Only 33.9% of sales is normal equity tranactions, and yes the balance is cash (investor) and FHA purchases by First time homebuyers. Once the goofy FTHB credit expires, the first timers will wane through the supply of buyers being pulled forward by the incentive.

    I wonder how many REC people said "it will never happen here" in Sacramento, the capital city of the biggest state in the union. Brimming with government jobs, now furlowed.

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  5. nonpartisanSeptember 12, 2009 10:26 AM

    i luv her

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  6. AnonymousSeptember 13, 2009 5:04 AM

    Prices are goig to rises in DC area! Too bad you don't have the funds to buy! Apply for a job with Uncle Sam... He will pay in Chinese Yuan ... LOL The USA is so done ... We are on our way to to the third world!!!
    God help us!

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  7. AnonymousSeptember 13, 2009 5:08 AM

    Am so surprised that a revolt or a full blown revolution has not started yet!!!!!

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  8. AnonymousSeptember 13, 2009 10:03 AM

    Im not, Americans are the most lazy apathetic people on earth. Thats the reason we are in the mess we are in now. Everyone here wants something for nothing.

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  9. SalmaanSeptember 14, 2009 2:34 AM

    DC prices to fall up to another 25%? I doubt it. As for the hyperbole, D.C. is different than most of the U.S. especially regarding the unemployment rate.

    Unemployment appears to be reaching it's top. If unemployment hits 15% then I could see a 25% drop. Banks are already becoming profitable again and will soon begin to pay back the bailout money.

    I guess we'll see.

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  10. AnonymousSeptember 14, 2009 3:38 AM

    ANON September 11, 2009 11:36 AM:

    You sound like some of the people who post on Vancouver, Canada blogs...they think they are different too.

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  11. AnonymousSeptember 14, 2009 7:40 AM

    Noz,
    I read that guys comment as sarcasm.

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  12. AnonymousSeptember 14, 2009 12:58 PM

    I did too...i just wanted to point out how they also sound over there...just that they are not using sacasm.

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  13. AnonymousSeptember 14, 2009 5:08 PM

    perhaps DC is the capital of canada then?

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  14. affiliasiSeptember 14, 2009 10:59 PM

    waw. that's great post. thank you for this info

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  15. What Is My House Worth?September 14, 2009 11:46 PM

    Woah...guess this 25% prediction smacks in the face of everyone who has been saying we've already hit the bottom.

    It'll be quite interesting to see what happens in the next year or two...fingers crossed!

    Thanks for the article!

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  16. Going downSeptember 16, 2009 10:43 AM

    I was at a conference yesterday where we were told unemployment is over 16% right now when you take into account those who stopped looking for jobs, or went off unemployment to take a part-time job (which does not pay the bills).
    When the official U3 "unemployment rate" gets to 15%, the U6 (Part time workers who want to work full time, but cannot due to economic reasons) number will be between 20-25% !!

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  17. SalmaanSeptember 16, 2009 7:52 PM

    Yeah and alot of those jobs are industry, blue collar, etc. You see alot of those in the DC/NOVA area?

    Article on yahoo just now about how D.C. continues to be a magnet for the young, successful.

    It's all moot anyway, unemployment isn't getting to 15%.

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  18. oboeSeptember 17, 2009 9:07 AM

    Prices in blue collar suburban areas to fall by 25%. White collar urban areas, no change. What you're seeing is the deflation of suburban housing values--same thing that happened to urban housing in the 60s and 70s.

    Of course, the cratering of suburban house prices could exert downward pressure on the desirable close-in areas: after all, the affluent could decide to move into a wasteland of abandoned houses and failing schools.

    Seems unlikely though.

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  19. AnonymousSeptember 17, 2009 4:39 PM

    If people want to play games with numbers that look at the % of the population that is currently in the employment market today vs 1980or earlier. Why...Over the last few decades there has been a dramatic change is the % of people who were even part of the work force. According to the U.S. Department of Labor, Women's Bureau. Between 1980 and 2007 the % of woman in the workforce encreased by 50%. The increase is even greater if you go back further. Basically if you really do the math you may come to find out the % of the population that is working today is still much higher than it has been if you consider every one who is eligable to work and not just those who are looking for a job.. Hmm very interesting....

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  20. AnonymousSeptember 17, 2009 4:58 PM

    If people really want to do a play on employment numbers. I would argue that there is a higher % of the population is employed now then throughout most of history. Heh?! Employment numbers are based on the % of people who are currently looking for employment and not the population as a whole. If you look at the entire population as a whole you will probably discover that a higher % of the population is employeed today than 25+ years ago. To understand how this could be, all one needs to do is look at increase of woman who have entered the work force. Between 1980 about a 50% increase in the number of woman in the workforce. The further and further you go back the less woman you will see in the work force. Basically over the last few decades there has been a huge increase to the % of the population who consider themself to be in the workforce and therefor can be considered unemployeed if they arnt working.


    Source: U.S. Department of Labor, Women's Bureau

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  21. AnonymousSeptember 21, 2009 5:00 AM

    so that does that prove? That it takes the entire family of say 4 working full time to pay a mortgage cause houses are so god awfully outrageously priced compared to incomes?

    That if little johnny and mom isnt helping with the rent too, the whole family will get kicked out?

    I wish I was born in our parents generation when the dollar actually meant something and you only needed one breadwinner.

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