Today’s Talking Point 9/30/09
There has been much conversation regarding where house prices are headed in the short term. The most quoted index is the Case-Shiller Index which is the report most media uses in their stories. For the last six months, the index has shown moderate growth in home prices. That has caused some to say we are at a bottom and heading upward.
However, there are other highly regarded indexes that are reporting a slightly different story. The average sales price in the Altos Research Index effectively bottomed out in January at $470,017, and climbed every month this year until August, when it decreased 0.6%. According to a report by Integrated Asset Services (IAS), after four months of gains, house prices across the US ticked down 0.5% in July. It marks the first monthly decline since February.
And some industry experts see further declines before we reach the bottom:
Patrick Newport of IHS Global Insight thinks home prices will fall another 5 percent before bottoming next year.
John Burns, a real-estate consultant based in Irvine, Calif. believes home prices will fall further, particularly in markets with large numbers of foreclosures. Overall, he expects home prices to decline 6% next year.
Banking analyst Meredith Whitney believes there is no doubt that home prices will go down dramatically from here and could lose another 25 percent.
I am not sure we will see another major drop in prices. However, I am also not sure we have reached bottom yet.
KCM MEMBERS: Pricing will be covered at length in the October issue of Keeping Current Matters which will be available the later part of next week. There will be presentation materials on the above points. You will be able to use the materials at your listing presentations and at your pricing consultations.