I’m starting to feel like a broken record regarding home values, but it is a slow news day, so here goes: a report from Altos Research via REO Insider’s Jon Prior states that home prices will continue to decline in 2010, and will start 2011 at lower levels than they were in 2009.
According to Altos Research, the main driver for the price decline will be the excess housing supply that is currently on the market as well as the shadow inventory of distressed and REO property that is yet to hit the market. Price declines will vary depending upon the market, the amount of housing supply in that given market, as well as demand in a given area.
There are a variety of estimates of the total amount of shadow inventory. Depending upon which research firm you choose to believe, there could be anywhere from 4-7 million homes that constitute the shadow inventory. Almost everyone is saying it will take several years to clear the inventory, which indicates we are in for a prolonged period of recovery.
Altos emphasized that the conditions will vary with locality, and that some regions may see a relatively quick recovery, while other places, such as California, Arizona, and Florida will take much longer to recover.
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