Home Prices To Plunge Another 11 Percent This Year

2/11/2009

posted by N. Sioris

Stumble It!

According to Mark Zandi, Chief Economist and co-founder of Moody's Economy.com, housing prices will dip another 11 percent before bottoming out at the end of 2009. If Zandi is right about when we will hit the bottom, then by that time the slide will have cut home values by 36 percent nationally. Of course some areas will have been hit by much larger losses. For example, Southeast Florida and parts of California are expected to realize losses of more than 50 percent.

Zandi qualified his statement by saying; "Presuming we see strong action by policymakers to help support the economy and the housing market, prices will begin to recover by the end of this year."

Demand for new and existing homes began to fall in 2005, marking the end of a five year U.S. housing boom fueled in part by easy credit for subprime borrowers. Existing home prices tumbled from an average high of $230,200. in July 2006 to $175,400. in December, 2008 according to the National Association of Realtors.

In another forecast this week from a Houston based housing market researcher, Metrostudy; housing starts are estimated to plunge 47 percent to 483,000 in 2009.