Home Prices Will Continue to Drop: It's Simply a Case of Supply and Demand

Reblogger Donna Stott
Education & Training with Your Coaching Matters

Great post, thanks!

Original content by Leslie Ebersole

Keeping Current Matters is the blog site of Steve Harney and his terrific real estate data ccollection and analysis team. Last week they published a series of reports and links from major industry analysts. The universal agreement is that home prices will continue to drop over the next six to eight months.

Steve published this chart last week that he says "may be the best real estate chart ever".

Steve's comment on the chart: "We can see that the experts are calling for prices to decline for the next year and then take another year to regain that loss and have values equal today's prices. They then see prices steadily appreciating over the following several years." Simply stated, prices will not recover to their current level until the end of 2012.

One of the sites that I also subscribe to is Altos Research, who had this to say in a report published on August 11:

"The market, right now, is a veritable case study of the law of supply and demand. Right now, there's a whole lot of supply, but very, very little demand. The buyers that drove a flurry of activity during the spring have left a deafening silence in their wake ... Increases in inventory nationwide show that demand simply isn't there. As the market continues to correct itself, and as we head into the seasonally weak fall and winter months, expect more increases in inventory, and likely deepening declines in asking prices."

I the next day or so I will publish the market updates for the areas I cover, including St. Charles, Geneva, Batavia, Wayne, Elburn and South Elgin.

Here's one example of the rising inventory and falling prices in Batavia (zip 60510). The orange line shows the rising inventory, while the black line shows the falling prices.  

 

Real Estate Market Chart by Altos Research www.altosresearch.com

 

This post was written by Leslie Ebersole of Baird & Warner Real Estate.

If you would like more information about the Chicago Western Suburbs and the Fox River Valley
St. Charles
, Geneva, Batavia, Wayne, Elburn, and South Elgin


Please call (630)945-7935
My website www.leslieebersole.com
Email me at leslie.ebersole@bairdwarner.com










 

 

 

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Rainmaker
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Carolyn Kolba
Serving Mentor, and all of Lake County, Ohio - Mentor, OH
Keller Williams Realty- Mentor, Ohio

Donna... what a silly thing for an article to say.  Home prices are NOT dropping in many areas of the country, and are actually rising in some.  If a market area has an oversupply of homes, and many, many foreclosures and short sales, of course the values will be dropping.  But... that is primarily the case in only FOUR states... California, Florida, Arizona and Nevada.  To globalize news like this article claims... is just plain wrong.

Aug 24, 2010 04:20 AM #1
Rainer
13,168
Donna Stott
Your Coaching Matters - Marietta, GA
Passionate Teacher / Lifelong Learner

Hi Carolyn... thanks for your comment. I reposted this from Leslie in Chicago who was using a graph from someone else. I didn't write this myself, but I do agree. -- Did you see the breaking news on CNN about an hour ago?
http://money.cnn.com/2010/08/24/real_estate/existing_home_sales/index.htm?hpt=T1
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This is a national problem. I coach 22 agents from Maryland to Washington State... from CA to Florida... including Colorado, Texas, Minnisota, Alabama, etc. Almost all of them (except DC and Maryland) are telling me that the Buyers have stopped buying despite LOWEST interest rates since 1971 and LOWEST prices in most areas in 6-12 years. These are people doing 20-80 transactions a year and many had 0 or 1 sale in the last 60 days.

It's critical that as Professional Agents today we are educating our Sellers, Past Clients, and Centers of Influence about the Market. Educating them will let them make the best decision for themselves. For most of them, that means selling sooner rather than later.

Yes, look at YOUR market and report the Supply and Demand numbers in your area.  But watching National Market is an important part of educating those that depend on you.

Donna

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Aug 24, 2010 04:57 AM #2
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Rainer
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Donna Stott

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