â€œThe crux of Simonâ€™s analysis is that the loose lending practices seen during the housing bubble allowed 5 million renters to become homeowners, and that the market is in the protracted process of evicting this group. He believes housing prices will decline 6 percent to 8 percent nationally, with 6 million to 7 million more foreclosures yet to come.â€
â€œThe problem with the real estate market remains excess inventory. Based on Shillingâ€™s research, there are 2 million to 2.5 million excess homes in the country â€” a supply that will take 4-5 years to work-off. The result: Housing prices will fall another 20% and underwater mortgages will balloon from 23% to 40%, he says.â€
â€œBoth warmer weather and the drop in distressed sales percentage have contributed to recent home price improvements. However, given the disappointing pace in housing demand recovery, both factors may turn against us in the coming winter and push home prices lower againâ€¦
This supply-demand imbalance affirmed JPMorgan analystsâ€™ estimate of a further 4% drop in home prices from the first quarter of 2011 to a new bottom next year.â€
â€œHome prices have gotten a little bit of a boost in recent months thanks to a seasonal uptick in market activity. Most analysts, however, expect further declines to characterize the later part of the year and possibly extend into next year, largely because of the huge supply of foreclosures on the market.â€
If you are thinking of selling in the next twelve months, you would probably do much better if you sold your house sooner rather than later.
Call me if you want help with your home purchase. We have a team, Christine Norcross & Partners, at William Raveis and we can help you find your dream home in theÂ Wellesley Real Estate marketÂ â€“ Natick, Newton, Needham, Wellesley, Wayland, Weston and more.
Other articles on Wellesley Real Estate:
Economy vs. Opportunity in Wellesley, MA Real Estate
Appreciation of Wellesley House Prices Through 2015
The Reality of Realty in Wellesley, MA