If you thought home prices were bottoming out, you may be wrong. They're expected to head a lot lower. ...With winter coming, Miami is about to start looking better and better.
Overall, the national median home price is predicted to drop 11.3% by June 30, 2010, according to Fiserv, a financial information and analysis firm. For the following year, the firm anticipates some stabilization with prices rising 3.6%.
In the past, Fiserv anticipated the rapid decline in home-sale prices over the past few years — though it underestimated the scope.
Mark Zandi, chief economist with Moody's Economy.com, agreed with Fiserv's current assessments. "I think more price declines are coming because the foreclosure crisis is not over," he said. ...
If Fiserv's forecast holds, Miami real median home price will tumble to $142,000 by June 2011. ...
Brad Hunter, chief economist for Metrostudy, which provides housing market information to the industry, ... pointed out that the tax credit for first-time home buyers helped support prices during the three months of Case-Shiller gains. ... But the market assistance ends when the credit expires on Dec. 1. Hunter also sees a new wave of foreclosure problems coming from higher priced loans and prime mortgages.
Tuesday, October 20, 2009
Fiserv: Home prices to resume decline
Home prices are predicted to fall 11% by mid-2010:
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In San Antonio we've had a 10% decrease in sales vs. a year ago with the avg price being $182,441.
ReplyDeleteAll that only means that higher priced homes will continue to decrease in value. But for lower priced home, like those 70% off PWC homes, how much more can they drop from here? In fact, lower priced homes have seem to find a bottom and they have attracted numerous bidders.
ReplyDeleteIt really doesn't make any sense to lump the housing market with an average price number. I agree that the average price will continue to trend down because lots of homes in the higher price range will go down, but those already hit hard are bottomed out. Every housing slump in the past was recovered like this.
Looks like the projection for the DC area is for prices to go up.
ReplyDeleteI agree with Anonymous@10:58, though, it all depends on price point and location, and things won't fall or rise uniformly. Averaging makes sense for a macro-economic analysis but it doesn't say much about particular situations.
"wireknob said...
ReplyDeleteLooks like the projection for the DC area is for prices to go up. "
Yep - I got excited when I saw this forecast. I trusted Fiserv as they were bearish back in 05 before the downturn really started. Thus, I figured they were saying we (meaning DC area) had more to go.
Sadly - they are forecasting DC area prices going up +5.6% next year. Sigh...
Anonymous said...
ReplyDelete"Sadly - they are forecasting DC area prices going up +5.6% next year. Sigh..."
For the DC area, it looks to me like they're predicting an annual decline of 11.5% from the latest known Case-Shiller data, followed by +5.6 from mid-2010 until mid-2011.
Down 11.5%, followed by up 5.6% still leaves you down 6.544% over two years.
The median household income for the DC metro area is about 100k. Historically, the median home price of the DC metro has been a multiple of 2.8 times the median income. After doing the math, you arrive at a median home value of $280,000. However, the current median value of a home in the DC metro area is $388,000. Consequently, if history is to serve as a gauge for values, there is more room for price declines.
ReplyDeleteI agree with anon at 10:58. I live in College Park, and we're WAY ahead of, say Bethesda in percentage price reductions.- Jim A
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