It seems like every month a new report indicates that residential property values are on the rise or on the decline. However, when you view the past year as a whole, all those rises and dips level out to leave property values “relatively unchanged from 2009 levels,” new data from Integrated Asset Services and CoreLogic indicate[1]. Overall, national home prices actually gained only about 0.9 percent in 2010, and that gain was not evenly distributed. While Florida in particular and southern states in general did show some “marked improvement” during the last three months of 2010, the majority of the country actually lost ground toward the end of the year as homebuyer tax credits expired.
While CoreLogic’s chief economist admits that 2010 was a “bumpy ride,” he thinks that the numbers overall indicate that “the largest declines [in property values] are over.” However, given that tax credits were largely what held annual prices steady overall for 2010, other experts believe that there could be a little more fallout before home prices actually hit bottom. Stan Humphries, Zillow’s chief economist, is predicting that “the ultimate end [to the declines] will come sooner rather than later” this year in areas like the Bay Area of San Francisco, but then predicts a “long, flat bottom” as “most markets will remain in malaise for an extended period of time”[2].
Factors like a still-unmeasured shadow inventory, a clogged foreclosure pipeline and unemployment will contribute to the extent of that malaise, and some experts are predicting that normal appreciation rates might fail to return for several more years. Now that most experts seem to agree that we are nearing the bottom of the market, are you in a hurry to buy?
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[1] http://www.dsnews.com/articles/industry-data-reveals-home-prices-ended-2010-showing-no-change-2011-02-08
[2] http://www.sfgate.com/cgi-bin/article.cgi?f=%2Fc%2Fa%2F2011%2F02%2F08%2FBUC81HK33N.DTL
