Home prices in Oct overcome forecast, sinking lower than expected

Experts predicted that home prices would fall in Oct, but not as much as reported Tuesday. Not since December 2009 had the Standard & Poor’s/Case-Shiller home price index reported a more significant year-to-year decline. The consensus was that the expiration of the homebuyer tax credit was becoming evident and a housing market double-dip is unavoidable.

What you should learn about the Case-Shiller home price index

Eighteen to twenty of the markets surveyed by the Case-Shiller home price index showed that home prices fell with October month-to-month home values. Several experts within the real estate industry anticipated a quite flat October. This was because Sept was so weak. There was a much worse decline in value of homes last summer. This was after the homebuyer tax credit ended. Within the 20 markets, there was a 1.3 percent drop from September to Oct in home prices. That meant an annualized price decline of 15 percent occurred. The worst drop was in Atlanta. It was a 2.1 percent drop. There were five markets that hit all time lows since the 2007 real estate market collapse. These occurred in Tampa Fla.; Seattle; Portland, Ore.; Miami; and Charlotte, N.C.

A double dip being seen in the housing sector right now

The opinion of the chairman of the S&P/Case-Shiller home price index was given. He said that the double dip in the housing industry that has been warned about may be happening very soon. Home prices in Oct have dropped 30 percent since peaking in July 2006. Home values will go down more in 2011 with all the foreclosures about to take place. Inventory of homes for sale is up 50 percent over December 2009. You will find millions of homeowners waiting for the real estate sector to recover.

2011 winners and losers in the housing industry

Realtors face bad news with the decline in home prices. Homebuyers will be winning with a double dip in the real estate industry though. The Case Shiller home price index reported that sales volume was down 25 percent from Dec. 2009 as potential homebuyers wait for the housing sector to bottom out. But there’s a catch. The depressed housing industry is a drag on economic recovery as it’s inextricably connected to high joblessness and low consumer confidence. Home values will likely go down as much as 3 percent in 2011 even though many economists are optimistic about 2011.

Information from

Bloomberg

bloomberg.com/news/2010-12-28/u-s-property-values-decline-more-than-forecast-in-s-p-case-shiller-index.html

CNN Money

money.cnn.com/2010/12/28/real_estate/home_prices_fall/?npt=NP1

Wall Street Journal

online.wsj.com/article/SB10001424052970203513204576047491075731426.html?mod=googlenews_wsj