Just take one dip and end it!
Just a quick post on a seemingly slow news day…
Add one more voice to the chorus predicting a double dip in housing. An article on Housingwire.com yesterday reports that data provider Clear Capital is predicting a decline in home prices in 2011.
According to Clear Capital, housing prices were up 5.7 percent between June and August, but Alex Villacorta, senior statistician for Clear Capital said the market was slowing:
“Overall, prices look poised to continue their deceleration with a likely drop into negative territory at the end of the year”.
Following the expiration of the first time homebuyer tax credit in April, demand for housing dissipated. There is a massive oversupply of housing on the market (12.5 months worth, as compared to 6 months worth in a normal market). This is all occurring against the backdrop of continued high unemployment. The standard measure of unemployment has lingered around 9.6 percent since last year. A broader measure of unemployment (U-6 unemployment) has been north of 16.5 percent for a year. In the absence of government intervention, it seems almost assured that home prices will resume falling. In fact, prices are likely falling right now, but have yet to show up in home price surveys like Case Shiller. Case Shiller is a three month average that has a two month lag. Look out for October and November’s Case Shiller reports. They could be ugly.
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