Average US Home Prices Will Fall by 6% More by 9/2011
Despite home prices plunging more than 27% in the last 3 years, a joint report recently issued by Fiserv and Moody’s Economy.com predicts that home prices in the US will continue to slide in 2010. The report contends that home prices will decline during the summer of 2010 with 2011 being the beginning of the stabilization of the housing market and pricing.
The report sites the 4.5 million mortgages that are either currently in foreclosure or have missed at least one payment (and are most likely headed into foreclosure). As the banks work through that large number of properties, most will not qualify for mortgage modifications, which have less than a 10% success rate. When these additional properties hit the already flooded foreclosure market, it will surely put downward pressures on REO and retail properties alike.
Additionally, the Federal Reserve has committed to stop buying up mortgage backed securities in March, which will push interest rates higher. That coupled with the end of the $8,000 buyer’s credit in June, will push demand for homes lower and prices lower with it.
Fortunately, according to CNNMoney.com, the Saint Paul Real Estate market (in fact, the entire Twin Cites market) will experience a smaller decline of 0.9% from September 2010 to September 2011. This is lower than the expected national average. If the employment market improves, this may counter act the drop in housing prices.
We will wait and see!
I am a licensed Realtor in the State of Minnesota. This website is not a multiple listing service, but each Minnesota & Minneapolis real estate agent is a member of the Regional MLS of MN, inc., a provider of the Minnesota MLS.
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