12/28/2011

Decline in U.S. house prices slowing.

 Home prices have been declining since 2008, with a federal tax credit in early 2010 only temporarily boosting prices. But while recent months have seen continued declines, the rate has slowed. The Case-Shiller Home Prices Indices reported a 3.9 percent decline in the third quarter, an improvement from the 5.8 percent decline in the second quarter. 

According to Zillow, homeowners are projected to lose $681 billion in home values this year, 35 percent less than the $1.1 trillion lost in 2010, and with losses concentrated in the first half of the year. 

The losses also come with a caveat: the surge in prices during the boom weren't grounded in reality, but rather speculation and easy credit. While the current market conditions are far from positive, pricing doesn't need to return to peak levels for housing to be considered on the upswing again. 

New York based property appraisal firm, Miller Samuel, estimates another 5 to 10 percent drop over the next year, with a real rebound may not happening until 2013.