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Falling Home Prices Spur a Return to Normalcy in Affordability in Southern California
Economists and housing market analysts say that with home prices comparable to 2002 and continuing to fall, we could be in for a lengthy period of fairly affordable housing. Typical prices of homes are currently below historical averages in comparison with incomes making them affordable to more buyers than any time since 2000. And if unemployment continues to rise, prices should drop even further.
The median sales price for homes in the South California area in January was 250k, a 40 percent drop from January a year ago, according to a report released Thursday by MDA DataQuick. The falling prices are largely attributable to an increase in foreclosed homes, which represented about sixty percent of January’s sales. Experts say that prices should continue the current trend, falling another 25 to 30 percent before stabilizing. Unemployment claims have been historically high in recent months, which should contribute to the continued dropping in home prices, as people already unemployed or in fear of layoffs are unwilling to buy a home. One analyst predicts that the trend in falling home prices will continue until the middle of 2010. He predicts that In Los Angeles the trend could continue into 2012. The last time ... more
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