Home Prices May Fall
This article was posted today from NewMax.com. While we do not subscribe to the gloom and doom scenario for San Francisco Real Estate, it is true there has been a correction from the frenzied market of a year ago.Note the liberal use of the words "could" and "would" in this story indicating that this is a forecast, not actually what has happened or is happening. Here's what they are saying.
- Mick Orton
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The National Association of Realtors yesterday announced that home prices could start to fall nationwide in the coming months for the first time in a decade, reports USA Today.
They made the announcement on the heels of reporting that existing home sales tumbled in June, for the eighth time in 10 months. The NAR also said that the number of homes for sale reached its highest point since 1997.
David Lereah, NAR chief economist, tells USA Today that he expects “price numbers to start deteriorating.”
In some markets, prices are already falling. Prices of condos nationwide have fallen 2.1 percent in a year. Single-family home prices increased just 1.1 percent from last year. “Prices got too high in some local markets,” Lereah said. “So you're seeing two things occur: Investors are leaving quickly, and regular home buyers are staying on the sidelines.”
As a result, there’s a 6.8-month supply of single-family homes and an eight-month supply of condos, according to the NAR. Compared to a year ago, existing home sales are down 8.9 percent.
“Markets which have been the hottest are quite likely to see home price declines,” John Ryding, an economist at Bear Stearns, tells USA Today. “In those markets, you could see declines for the year.”
In the West, which includes hot housing markets California, Nevada, and Arizona, sales of existing homes fell 17.1 percent in a year. The California Association of Realtors announced that home sales plunged 26 percent in a year and are off 20 percent for 2006.
“Affordability has probably hit a record low,” Robert Kleinhenz, deputy chief economist for CAR, tells USA Today.
In the Northeast, another hot housing region, sales fell 9.8 percent. The Midwest experienced a 6.2 percent decline in sales, and sales in the South fell 5.5 percent.
The Washington Post reports that home prices in the Washington, D.C. area are falling in certain areas for the first time in five years.
Peter Morici, an economist at the University of Maryland, tells the Post “prices could drop 10 percent by the end of the year, and perhaps by 20 percent ‘by the time it's all over.’”
Editor's Note:
Real-estate expert and Yale professor Dr. Robert Shiller says that housing prices nationwide could fall by as much as 40% over the next few years. In this exclusive interview, find out how the five ways to protect yourself and profit from the coming real estate crisis. Go here now.
- NewsMax.com
posted by SFResidence.com @ 9:52 AM
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