Well, this is no good:
According to a report issued by Zillow this morning, home values have declined 26 percent from their 2006 peak. This eclipses the 25.9 percent decline in home values that occurred during the Great Depression (1928-1933). Although these declines are not uniformly distributed across the country, most every market has felt the pain to some degree. November was the 53rd straight month that home values dropped.
The bad news is that many analysts are predicting that home prices will continue to fall in 2011. David Blitzer, the Chairman of the (Case-Shiller) Index Committee at S&P recently commented:
“The double-dip is almost here, as six cities set new lows for the period since the 2006 peaks. There is no good news in October’s [Case-Shiller Home Price Index] report. Home prices across the country continue to fall. The trends we have seen over the past few months have not changed. The tax incentives are over and the national economy remained lacklust in October, the month covered by these data. Existing home sales and housing starts have been reported for both October and November, and neither is giving any sense of optimism”.
While there is no clear consensus, most seem to be calling for declines in home values of about 5-10 percent in 2011. The reason for the expected declines are simple: there is an abundance of unsold homes in the United States, and very little demand for them. Complicating matters is that the number of unsold properties in the United States will likely continue to increase next year. Moody’s is predicting that we will see 2.1 million foreclosures in 2011, up from 1.8 million in 2010 (it is worth noting that this prediction was made prior to the Massachusetts Supreme Court case that may invalidate some foreclosures. The impact of this case remains unclear). With continuing high unemployment and excess housing stock piling up at record rates, continued downward pressure on home values is all but assured.
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