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Today’s Talking Point 11/04/09

Pricing

Though sales are strong and it seems as though the tax credit will be extended AND expanded, we must realize that pricing is still crucial.
Two points on the subject:

From The Wall Street Journal:

By slowing mortgage foreclosures and giving a first-time home buyer tax credit, the U.S. government has driven up home prices by 5 percent, investment bank Goldman Sachs said Friday in a market report.

Goldman believes these supports won’t keep home prices up forever. “The risk of renewed home-price declines remains significant,” wrote Goldman economist Alec Phillips, “and our working assumption is a further 5 percent to 10 percent decline by mid-2010.”

From CNNMoney.com:

If you thought home prices were bottoming out, you may be wrong. They’re expected to head a lot lower.

Home values are predicted to drop in 342 out of 381 markets during the next year, according to a new forecast of real estate prices.

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%.

Let’s make sure OUR sellers are told the truth and given legitimate options. That is the only way their house will be priced properly.


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1 reply
  1. John Richard Wilson
    John Richard Wilson says:

    We have seen a little reprieve from the 8k tax incentive program, and an extension will help delay the inevitable for a short while, but a huge number of homeowners are in serious default with their home loans. There is a huge inventory of foreclosure properties in the tube just waiting to be spit out on the other end at a rapid pace. Short sales have become the norm. Buyers smell blood and are looking for bargains, and an increasing number will only buy discounted properties. In the end, there will be another round of rapid price decreases in most markets. Sellers need to price their properties to sell NOW before the new round of foreclosures hit.

    Reply

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