We have talked about the United States real estate market falling into a double dip recession for the past couple of years. We have worried about it, heck most agents and brokerages have had the night sweats over it.

Well folks, it is here.

From October to November, prices fell in 19 of the 20 metro areas tracked by the Standard & Poor's/Case-Shiller index, widely considered a gauge of the housing market's health. The only exception was San Diego, where prices were basically unchanged.

Only four areas posted year-over-year gains in November, including Los Angeles, San Diego, San Francisco and the Washington region. But in the aggregate, prices dipped 1.6 percent in November from the same time a year earlier, falling in 16 cities.

The nine cities that hit their lowest annual levels since the housing bust started were Atlanta, Charlotte, Chicago, Detroit, Las Vegas, Miami, Portland, Ore., Seattle and Tampa. via the Washington Post

The biggest problem isn't the prices dropping, that is the symptom. The biggest problem is that consumers will lose their confidence in the housing market.

That will be brutal. We gave billions of our tax dollars to home buyers and sellers to try to reassure them that housing was a good choice for their investment dollars. Even while mortgages were getting harder to get, buyers were coming into the market due to the low interest rates. Now it seems like they are willing to sit it out and watch.

Sure homes will get sold, but it is a question of velocity. For a market to work the velocity and confidence need to be there. Let's hope that this downturn is short lived and the buyers return.

 

3 Comments on The Real Estate Double Dip Is Here

FEB
09
2011
157,547 Points Called Shot Master

Velocity matters!  To help confidence. knowing or feeling comfortable with what is ahead makes a big difference.
6:04pm • #1
217,695 Points 13 Featured Posts Called Shot Master

Call me an optimist, but if prices dropped 1.6% for the entire year in those markets, that's a sort of IMPROVEMENT. While we have not seen an end to the slide, that's a dramatic improvement over the 10 to 12% dips of earlier years.
6:06pm • #2
FEB
10
2011

Liz I truly try to be. But I find being up front about the condition of the market makes me find the advantages to keep me and my team ahead of the game and my clients and office agents like to have the facts presented to them today and not to sugar coat. Until we see upward movement in a positive way then we continue to have risk of a double dip. The new foreclosure statitics are not pretty for the 2nd half of this year. But I still hope the end is near and the upward turn will begin
10:13am • #3


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Mike Tezak

Valparaiso, IN

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