Homeowners Expect Prices to Fall

Provided By Realty Times

Has renewed concerns over the job market affected the way agents and homeowners feel about the market? HomeGain's nationwide third quarter 2011 home values survey found that forty-seven percent of surveyed real estate professionals nationwide expect home values to decrease over the next six months.

Additionally, an overwhelming majority of buyers feel that homes on the market are still overpriced, with 30 percent reporting they feel homes are overpriced by 10 to 20 percent.

Is this opportunism running rampant? Recent studies in affordability rates could lead us to believe so, as home values have plummeted across the nation and are already at generational highs.

Is the sentiment of overpriced homes a symptom of reduced consumer confidence in the market? Lynn Franco, Director of The Conference Board Consumer Research Center, reported late last month, "Consumer confidence deteriorated sharply in August, as consumers grew significantly more pessimistic about the short-term outlook. The index is now at its lowest level in more than two years. A contributing factor may have been the debt ceiling discussions since the decline in confidence was well underway before the S&P downgrade. Consumers' assessment of current conditions, on the other hand, posted only a modest decline as employment conditions continue to suppress confidence."

On top of these already dismal findings, foreclosures are still a large segment of most area markets. The largest percentage (32 percent) of those surveyed see 10 to 20 percent of the market made up of foreclosed properties.

“Homeowners have joined real estate professionals and now share their dour view on the direction of home prices. Last quarter only 30 percent of homeowners expected home prices to drop in the coming six months while 50 percent of real estate professionals expected price declines. In the current survey 45 percent of homeowners and 47 percent of real estate professionals expect home price declines in the next six months,” said Louis Cammarosano, General Manager of HomeGain.

Are you curious to know which states real estate agents and homeowners think will see price increases in the next six month? HomeGain supplies us with the list.

•Arizona
•Florida
•Texas
•California
•Ohio
•Tennessee
•Colorado
•Georgia
•Virginia
•Washington

On the flip side are the 10 states where agents and homeowners expect to see home price declines.

•New Jersey
•Pennsylvania
•North Carolina
•Georgia
•Virginia
•Illinois
•Massachusetts
•New York
•California
•Ohio

It's important to point out that several states made both lists. How can this be? It's just another clue that our market is volatile and unpredictable at this time. Too much of the housing market is tied to fluctuations in the jobs and stock market. Yet, real estate is extremely localized as well. You may have a boom market on one side of Ohio while another city across the state experiences declines.

In a down national economy, such as the one currently seen in the states, it's wise to keep an eye on national economic trends in stocks, jobs, and banking. It's also wise to take a hard look at your local economy. It may be the best future indicator of where housing will go in your community in the next six months.

Are you interested in learning more about home prices? Give us a call at 972.772.7000 or email us at frontdesk552@kw.com.