Tuesday, April 20, 2010

Home values due to tumble another 17 percent

Turning back couponing clock
Smushed data from the home price indices of four major number crunchers reveals, on average, home prices still have a 17 percent fall in store, but recovery could be only a year away. We can only hope.

by Broderick Perkins
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Deadline Newsroom - Home values nationwide will fall an average 13 percent this year.

That's good news -- sort of.

With another 17 percent decline remaining before the market finally bottoms, turnaround may be just about a year away.

We can only hope.

The forecast is courtesy NewObservations.net's compilation of four major home price indices.

New Observations is an online mortgage and real estate information publication published by Michael David White, mortgage commentator and CEO-broker of The New Mortgage Company brokerage in Chicago, IL.

White smushed data from the home price indices of S&P/Case-Shiller; Federal Housing Finance Agency's (FHFA); First American Core Logic; and Freddie Mac.

Averaging the indexes, White found:

• How far values have fallen since the peak: 20 percent. (Some markets have seen prices decline by 50 percent or more).

"The variance between the indexes is demonstrated by a tally of current losses. It is only nine percent according to FHFA, but it is 30 percent at Case Shiller," white writes.

• How much further home values will plunge: 17 percent. (Some markets are already at bottom, even on the way up.)

• Estimated value loss in home values expected this year: 13 percent.

"The losses for this year projected in the four indexes vary widely and range between 3 percent and 24 percent. The indexes predicting large losses this year are biased by quicker and deeper losses which they registered following the peak," White reports.

• Percent of expected home value loss already experienced: 56 percent.

"The average of four major nationwide indexes measuring prices also continues to suggest we hover right around a middle point of the total loss expected," White writes.

However much more value is left to wring out of the market, housing could still be a decade away from a full recovery.

Chart: A summary of results from major residential property indices. (NewObservations.net)

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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 was the first Examiner to cover three beats for the Examiner.com news service:
National Offbeat News Examiner
National Consumer News Examiner
National Real Estate Examiner

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George Courtney said...

Where's the good news of this post

Deadline Newsroom said...

The end is near?