As REO and short sales abound, home prices in most markets continue to fall

Source: Wall Street Journal

The Wall Street Journal's Nick Timiraos and Dawn Wotapka got a sneak peak at Zillow.com data that indicates first quarter home prices fell 3% sequentially, and 1% in March from the month earlier. Their focus for this article is on gloom surrounding the reality that the house-price correction that got underway in 2008 is not done yet. The mainstream media is all over this as a double-dip--as if the tax credit stimulus programs were not temporary measures that helped some sellers hold the value of their homes amid an artificially prodded demand surge. We're of a mind that the trend is part of a single correction that is most likely bound to overshoot and then spring back a little once excess supply becomes more of a known quantity--which it not. Timiraos and Wotapka write, "While some analysts have argued that home prices need to fall to "clearing prices" that will attract more buyers, price declines could also complicate any recovery by pushing more borrowers under water. Zillow estimates that more than 28% of borrowers owe more than their homes are worth nationally. Those numbers are much higher in hard-hit markets such as Phoenix, where more than two-thirds of borrowers owe more than their homes are worth."

Home values posted the largest decline in the first quarter since late 2008, prompting many economists to push back their estimates of when the housing market will hit a bottom.

Home values fell 3% in the first quarter from the previous quarter and 1.1% in March from the previous month, pushed down by an abundance of foreclosed homes on the market, according to data to be released Monday by real-estate website Zillow.com. Prices have now fallen for 57 consecutive months, according to Zillow.

URL to original article: http://www.builderonline.com/builder-pulse/as-reo-and-short-sales-abound--home-prices-in-most-markets-continue-to-fall.aspx?cid=NWBD110509002

For further information on Fresno Real Estate check: http://www.londonproperties.com