Price Of Homes Keeps Slipping
The average price of homes in the U.S continued to fall for the fifth straight month by a record 19% in the first quarter as compared to last year, as housing markets across the country remain under pressure from high inventories and mounting foreclosures.
Analysts are skeptical that these figures show that the housing market has bottomed. Single-family housing starts, new-home sales, and existing home sales seem to be stabilizing at very low levels, reports MarketWatch. However home prices must also stabilize in order to see a sustainable gain in home sales. Again, with high inventory piling in the housing market, we’ll likely continue to see downward pressure on home prices. Home prices falling rapidly also means millions of homeowners may find themselves underwater, in which they owe more on their home that what it is worth, leaving them vulnerable to debt and ultimately foreclosure.
Home price market estimates come from the S&P/Case-Shiller index that tracks home prices across 20 U.S metropolitan areas. Prices in 17 of 20 U.S large metropolitan areas exhibit slipping home prices. Prices in the best market, Denver, went down 5.5%. Prices in Phoenix, Las Vegas and San Francisco are down 30% or more in the past year.
While home sales tend to be weakest December to February due to winter weather, luckily the housing market picks up during the spring season. With the added incentive of the home buyer federal tax credit ending in April 30 and historically strong home sales in summer as well, housing prices may stand to stabilize more.
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