Wednesday, October 21, 2009

Predictions, Predictions

Talk in the Real Estate industry surrounds usually two conversations: Has the market bottomed or has the market peaked? An as I eat at Jim’s Coffee Shop or stop by Spritzer’s Café I hear local Alamedans repeat many of these conversations.

There are many that believe that the bottom has not yet come for the Nation’s housing market. CNNMoney writer Les Christie penned an article today
titled “Homes: About to get much cheaper.”

If you thought home prices were bottoming out, you may be wrong. They're
expected to head a lot lower.

Home values are predicted to drop in 342
out of 381 markets during the next year, according to a new forecast of real
estate prices.

Looking at the past 21 month, Homeowners in Alameda saw the median home price fall to a low of $457,000 in January of this year. Since that low the median price for the Island has gone up as sales volume increase. April was the peak for the year at a $602,000 median.

On the negative side for our community, September saw a 5 percent year-over-year decline; from $545,000 to $517,000 in 2009. If you compare this to the rest of the Nation this is a mild contraction.


Back to the article. For next year Fiserv, a financial information and analysis firm, predicts the overall national median home price is predicted to drop 11.3% by June 30, 2010.

Places that have been hard hit in Florida will continue to suffer according to the report. Miami, for example, is expected to be the biggest loser. Prices are forecast to plunge 29.9% by next June -- after having already fallen a whopping 48% during the past three years. Fiserv predicts: Orlando, Fla., 27% price decline; Las Vegas, expected to lose another 23.9%; In Phoenix could fall another 23.4%.

These dire predictions should not impact Alameda’s local home price. Jobs and inventory will have more impact than what is happening for the rest of the country. But if housing continues to fall you will see the trickle of decline.

As I wrote about last month both S&P/Case-Shiller Home Price index and NAR have predicted prices have stabilized. The tax credit has help spur sales, but the market assistance ends when the credit expires on Dec. 1 and a new wave of foreclosure problems coming from higher priced loans and prime mortgages are due to hit the market.

Big shout out to my new blogging friends, I taught a session on Real Estate Blogging yesterday and got 30 people up and running with brand new blogs. Welsome and start writing.

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