Home prices are forecast to fall more than 30% in some communities in 'the most severe housing recession' since 1945.
Housing markets from Orlando, Fla., to Stockton, Calif., will crash, and some will suffer price drops of more than 30% before the housing crisis is over, a report from Moody's Economy.com said today. I find this funny because once again the media is slow to find out. I've been telling people now for a year that we won't see the bottom until fall of 2009.
We are now in the spring here in Orlando and I've sold 4 homes this week and listed another. Does that mean we're turning the market? My opinion is NO. It's simply the seasonal shift that we always have. Buyers always come out around the end of February and buying subsides in August.
On a national level, the housing market recession will continue through early 2009, said the report, co-authored by Mark Zandi, chief economist of Moody's Economy.com, and Celia Chen, director of housing economics.
The report paints a worsening picture of the hard-hit housing sector, which is in the midst of its worst downturn since World War II. Again, I say we won't see an up-tick until 1st quarter of 2010.
While activity will stabilize in 2009, it will be 2010 before a measurable improvement in sales, construction and pricing will emerge, the report said.
Overall, house prices are forecast to fall 13% from their peak through early 2009. After accounting for incentives home sellers are offering buyers, effective declines from peak to trough will total well over 15%, according to the report, which said the housing recession will ultimately be severe enough to be characterized as a housing crash.
Punta Gorda Fla. and Stockton are the hardest hit markets in the United States, with price declines from peak to trough forecast at 35.3% and 31.6%, respectively.
"This is the most severe housing recession since the post-World War II period," Zandi told Reuters.
These markets have been hard hit due to several reasons, namely the exiting of investors from the areas, a fair amount of subprime mortgage loans causing an increase in foreclosures and overbuilding by home builders, Zandi said.
As I personally look at the MLS and each subdivision - community I see that nearly 10% of the homes are in short sales or foreclosure. We're looking at another 12-18 months before all of those get washed out. However, that means there are some fantastic deals for buyers. The funny thing about is that when the media catches on and says that the market is turning, the great deals will be gone.
In summary, I say if you want a great deal on a house call me now and lets find you that great deal now, before they all disappear.
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