Home prices fell in the first quarter of 2010 but are still higher than they were a year ago.Government intervention paused the fall in housing prices over the past year, but now that the tax credits are gone I expect the free market to continue pushing prices lower.
According to the S&P/Case-Shiller nation-wide index, home prices fell 3.2% quarter-over-quarter but have still managed to climb 2% year-over-year.
The index continued to show weakness despite very low mortgage interest rates and tax incentives to encourage home purchases. ...
"The housing market may be in better shape than this time last year; but, when you look at recent trends there are signs of some renewed weakening in home prices," says David M. Blitzer, chairman of S&P's index committee.
Brad Hunter, who follows the housing market for Metrostudy, a consulting and data-providing company, is predicting further price erosion along the lines of 10% or so before the market fully bottoms out.
Speaking of the tax credit:
New home sales soared in April as homebuyers rushed to claim the tax credit that expired at the end of the month.Now that the tax credit has expired, the temporary boost in home sales is likely over. After all, who wants to be the sucker who buys his house on May 1?
New home sales climbed 14.8% to a seasonally adjusted rate of 504,000 last month, up from an upwardly revised 439,000 in March, the Census Bureau reported on Wednesday. Sales year-over-year were up 47.8%. ...
April was the second straight month of increases. In March new home sales snapped a four-month losing streak and surged at the fastest single-month rate in 47 years as homebuyers snatched up properties ahead of the looming deadline for the tax credit.
The homebuyer tax credit, which expired April 30, boosted sales since buyers had to sign contracts by the end of last month.
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Forward demand all used up makes for more inventory in future months. I always like lots of selection when I buy something.
ReplyDeleteIf thats the case, then you should have bought 2 years ago when selection was double and prices were bottoming out.
ReplyDeletehttp://www.recharts.com/nova/nova.html
It really is amazing to look back at how high inventory was back in 2006-2008. At the time, I was like a kid in a candy store thinking I could have any house I wanted - I mean there were so many choices.
ReplyDeleteNow I look around at all the leftover scraps and I think, WTF happened :)
No, I'll wait to buy when the second decline in prices takes place. But thanks for your inadequate advice.
ReplyDeleteI bought a house last November and all I do is fix things. When I rented I had so much free time.
ReplyDelete"Now I look around at all the leftover scraps and I think, WTF happened :)"
ReplyDeleteDo you really?
As a potential buyer, I just need to adjust my offer downward to compensate for the loss of the $8K credit. Is it more appropriate to ask "who wants to be the sucker who sells their house on May 1st?"
ReplyDelete", I just need to adjust my offer downward to compensate for the loss of the $8K credit."
ReplyDeleteActually you will have to adjust it a lot lower than $8K now that the buying has completely stopped.
No, I'll wait to buy when the second decline in prices takes place.
ReplyDeleteThats what my BIL did. Waiting for the second decline in 1995. He's still waiting today.
My sister bought in 1990 in N. VA and it took ten years before she saw any increase in value. So 2015 would be an ideal year.
ReplyDelete"Now I look around at all the leftover scraps and I think, WTF happened :)"
ReplyDeleteDo you really?"
I do. I thought we would get at least 1 more year of peak/near peak inventory before the dramatic decline we saw in 2009.
"I do. I thought we would get at least 1 more year of peak/near peak inventory before the dramatic decline we saw in 2009."
ReplyDeleteInstead of the constant massive inventory for the next 25 years and flat prices? Oh well, buy in 3 or 4 years down the road when prices will be 5%-10% lower than they are now.