Today’s Talking Point 11/04/09
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.”
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.