Recent widespread price declines reveal a shaky post-credit US housing market that threatens to plunge even further in 2011. But taking into account typically sluggish winter activity, rock-bottom interest rates and real estate bargains should keep sales slowly climbing. See the following article from Property Wire for more on this.
Falling property prices in the US may be producing an increases in sales but the outlook for the country’s real estate market is still poor as analysts are warning that prices could drop to new lows in 2011.
The latest index from CoreLogic fell 1.5% in August from a year ago, the first annual drop in prices, but individual markets are seeing steeper prices drops. Prices did stay 0.6% above the level in the July, but nationally prices have dropped 28.7% from their peak in April 2006.
In August, 78 of the 100 metropolitan statistical areas surveyed by CoreLogic had price drops, compared to 58 in July, according to Mark Fleming, chief economist for the analytics firm.
Maine had the best outlook with prices rising 5.8%, followed by a 3.7% increase in New York and a 2.5% gain in Connecticut. Prices fell the most in Idaho, down by 14% in August, and there was a 10.4% fall Alabama and a 7.3% drop for Utah.
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According to analysts at Clear Capital a 6%, two month decline in property prices represents a magnitude and speed not seen since March 2009. Its data shows more pronounced price declines than others.
‘At the national level, home prices are clearly experiencing a dramatic drop from the tax credit induced highs, effectively wiping out all of the gains obtained during the flurry of activity just preceding the tax credit expiration in April,’ said Alex Villacorta, senior statistician with the data analytics firm.
Prices are now at the same level as in the middle of April, two weeks prior to the expiration of the federal homebuyer tax credit. The drop, in advance of typical winter housing market slowdowns, paints an ominous picture that will likely show up in other housing indices in the coming months.
The National Association of Realtors said seasonally adjusted sale rose to 4.53 million in September from a downwardly revised 4.12 million in August. The rate continues to move away from the 3.83 million reported in July which was the lowest level recorded since NAR began publishing its reports in 1999.
But existing sales still remain 19.1% below the 5.6 million for September 2009 when demand increased in advance of the initial deadline for the homebuyer tax credit last November.
‘A housing recovery is taking place but will be choppy at times depending on the duration and impact of a foreclosure moratorium. But the overall direction should be a gradual rising trend in home sales with buyers responding to historically low mortgage interest rates and very favorable affordability conditions,’ said Lawrence Yun, NAR chief economist.
NAR, which measures the completed transactions of single family, townhomes, condos and co-ops, said the median price for all housing types was $171,700 in September, down 2.4% from a year earlier. Distressed sales accounted for 35% of sales last month, up slightly from 34% in August and 29% a year earlier.
Florida is an example of how up and down the market can be. Sales of existing single family homes in Florida fell by 8% in September year on year but existing condo sales increased 10%, according to housing data from real estate agents group Florida Realtors.
Ten of Florida’s metropolitan statistical areas reported higher existing condo sales in September, but prices were down significantly, averaging $83,400, down 18% from $102,300 last year, but up 2% over August.
This article has been republished from Property Wire. You can also view this article at Property Wire, an international real estate news site.