Home values may be lower than they should be -- that's right -- but a recent report says the bottom is still a ways off, with Arizona, California, Florida, Georgia, Maryland, Michigan, Nevada and Virginia the hardest hit areas.
by Broderick Perkins
© 2008 DeadlineNews.Com
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Deadline Newsroom - With few exceptions, the continued plunge in home prices has pushed values lower than, perhaps, they should be, according to IHS Global Insight a financial analysis and forecasting firm.
Home prices are down at an annualized rate of 13 percent and prices have slipped in 302 of 330 metro areas, 92 percent of them. That's the greatest rate of decline in the current sliding housing cycle.
Prices have fallen about 10 percent since their peak, says IHS Global. Other measures say the plunge is a lot deeper.
When the 330 metro areas were weighted by market value, the nation's housing as a whole was 8.4 percent undervalued; when weighted by housing units, the nation's housing was 10.2 percent undervalued.
IHS says the rates of value decline have exceeded the fastest appreciation rates of the bubble years of 2004 and 2005.
Only the Pacific Northwest, extending into Idaho and Utah, remained overvalued across a wide region.
Statewide average home price declines for 2008 exceeded 20 percent in Arizona, California, Florida and Nevada, and exceeded 10 percent in Maryland, Michigan, Georgia, and Virginia. Detroit, hit hard by the problems of the domestic auto industry, joined 40 sand state metros with declines for the year greater than 20 percent.
Prices in five metros in California's Central Valley have fallen to less than half their peaks this decade; 38 other metros have seen prices fall more than 30 percent. In all, 119 metros, more than one third of the total, experienced price declines of more than 10 percent.
The declines come as a deepening recession and Wall Street woes mount. In addition to unsold inventory and tight credit, home prices also took a hit from crumbling consumer confidence and millions of job losses, the study said.
Jeannine Cataldi, senior economist and manager of IHS Global Insight's Regional Real Estate Service, said: "We expect prices to decline further through 2009 as consumers remain wary of taking on housing debt in these uncertain economic conditions."
James Diffley, group managing director of IHS Global Insight's Regional Services Group, said: "What is most worrisome about these sharp declines, and the general economic deterioration as 2008 ended, is that there is no sign of a bottom yet."
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© 2008 DeadlineNews.Com
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Broderick Perkins, an award-winning consumer journalist, parlayed 30 years of old-school journalism into a digital real estate news service, the San Jose, CA-based DeadlineNews Group, including DeadlineNews.Com, a real estate news and consulting service and Web site, and the Deadline Newsroom, DeadlineNews.Com's news back shop. Perkins is also a National Real Estate Examiner. All the news that really hits home from three locations -- that's location, location, location!
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