Flat Housing: A Good Thing?

I was watching a segment from MSNBC about the most recent S&P/Case Schiller housing report and the findings are that we are in a flat housing market based on Sales price. Locally, Alameda has been in a flat market since at least May in terms of inventory and median home prices.

The key according to the experts is inventory and how quickly the bank unwind their holdings of foreclosed properties. Susan Wachter, a real estate professor at Wharton, and Patrick Newport, of IHS Global Insight, discuss whether a flat round of S&P/Case-Shiller numbers is good for home prices in 2010. Newport was negative about the housing market, he believes that home prices will continue to fall because one in four homes is underwater (the borrower owes more than the house is valued) and record foreclosures.

Many in the industry have been predicting a new wave of foreclosures in 2010 and according to Newport the only way to unwind the inventory is to lower prices. This shadow inventory has yet to reveal itself, according to RealtyTrac Alameda has 103 properties in pre-foreclosure, 77 auction properties, and 80 banked owned properties. Since Alameda only shows 12 foreclosures for sale there is a big gap between the listed and held properties by the banks.

Even Newport does not believe that it will be a large decline in prices because most markets have already fallen to apparent bottoms. The SF Bay Area has seen rising prices and multiple offers back, much depends on what the back do in the first half of 2010.

The segment is worth a watch. Sorry about the link the embed code was not working

http://www.msnbc.msn.com/id/21134540/vp/34622689#34622689