While the cheaper homes on the market are not likely dropping much lower in price, the value of the more expensive homes will continue to drop. The continual drop in home prices for higher-end will slow the overall recovery of the housing market.
The S&P/Case-Schiller home-price index tracks home prices in 20 major cities in the United States. The home prices for October 2009 were 7.3% lower than they were a year earlier. The index shows us that home prices for October were around the same levels as they were during the fall of 2003. Lower than the house price peak during the second quarter of 2006.
These home price figures for October, which were down 7.3% from October of, last year, showed us the least amount of decline year-over-year since November of 2007. They also show us lower home price than September 2009, which ends four months of home price improvements that in it could cause doubts about the recovery of the housing market.
There have been many signs indicating that home prices could have already bottomed out and are now on their way up, however, there are many market observers that believe that home prices overall will decline by an estimated additional 10% before they show a steady slow increase.
The main cause of the price drop predictions is the expectation of a large number of foreclosures that will flood the market and lower home prices across the nation.
The government tax credit has helped the housing market by boosting the sales number s of homes, but distressed properties have continued to lower the home prices.
Lower priced homes are starting to decrease in percentage of total foreclosures while middle and high priced homes are increasing in foreclosure percentages. This data obtained from Zillow.com suggests that while lower priced homes are likely to level out in price, middle and high priced homes still have further to fall.
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Not good news for an already weak housing market. We need jobs! That’s the key to all our problems. Foreclosures are killing us!!
.-= Matt@New Homes Atlanta´s last blog ..Act NOW if you are a FHA Buyer!! =-.
Something needs to happen for the homes in upper price ranges to start selling, that market is struggling badly. In my area the below $200,000 market is doing great, above that is a whole different story. We may have hit bottom, but people are still scared to step into the higher priced homes.
This has something to do with how we regulate the prices of homes as we step into the new phase of selling and buying of homes. Although, we had bad news for those homes which were so expensive but still we can catch it up if we follow the flow of the trends in the market in the first or second quarter of the year. Let’s just be patient. We need to struggle little by little and we can regain something worthwhile in the end.
.-= Realhomesestate´s last blog ..23.8 percent down in sales of million dollar homes in Golden State area =-.