{"id":3178,"date":"2011-01-31T05:25:35","date_gmt":"2011-01-31T12:25:35","guid":{"rendered":"http:\/\/www.jasonapollovoss.local\/?p=3178"},"modified":"2018-09-21T02:08:19","modified_gmt":"2018-09-21T06:08:19","slug":"home-prices-still-falling","status":"publish","type":"post","link":"https:\/\/jasonapollovoss.com\/web\/2011\/01\/31\/home-prices-still-falling\/","title":{"rendered":"Home Prices Still Falling"},"content":{"rendered":"

Several weeks ago I wrote a post about the inevitable continued decline in home prices<\/a> in a post dated 18 January, 2011.\u00a0 This morning the Wall Street Journal is reporting the results of its latest quarterly survey<\/a> of regional home prices that confirms what I wrote recently.<\/span><\/p>\n

 <\/p>\n

Specifically, in all 28 metropolitan areas that the survey tracks prices declined as compared with prices one year ago.\u00a0 Not only that, but also the price declines accelerated<\/em> in 25 of the 28 markets.\u00a0 This is not good.\u00a0 Could it get worse?<\/span><\/p>\n

 <\/p>\n

In order for real estate conditions to improve nationwide two things have to happen:<\/span><\/p>\n

 <\/p>\n

    \n
  1. the massive inventory of unsold properties has to decline, and…<\/span><\/li>\n
  2. buyers have to be willing and<\/em> able to buy<\/span><\/li>\n<\/ol>\n

     <\/p>\n

    Supply side of things<\/strong><\/span><\/p>\n

    As I wrote earlier this month, there is just way too much supply in real estate markets right now.\u00a0 In fact, the Wall Street Journal survey bears this out.\u00a0 In many of the 28 markets tracked inventory is above 12 months.<\/span><\/p>\n

     <\/p>\n

    That means that if no new real estate came on the market right now that it would take a full year to work through all of that property.\u00a0 Yikes!<\/span><\/p>\n

     <\/p>\n

    Clearly there is downward price pressure here.<\/span><\/p>\n

     <\/p>\n

    Demand side of things<\/strong><\/span><\/p>\n

    Now on the other side are buyers.\u00a0 Many prospective buyers are still worried about the jobs market and the last thing on their minds is buying some illiquid property and undertaking the cost of a move.\u00a0 Ouch!<\/span><\/p>\n

     <\/p>\n

    Because of the continued decline in home prices brought about by desperate sellers, it is a “buyer’s market.”\u00a0 In other words, if you are a prospective buyer of a home it behooves you to wait until prices fall further.\u00a0 Buyers can therefore be assured of not having overpaid for a property.\u00a0 So buyers are not willing to buy now<\/em>.<\/span><\/p>\n

     <\/p>\n

    Unfortunately, even willing buyers are still finding it difficult to piece together financing in order to buy real estate.\u00a0 Having had such ridiculous and practically non-existent underwriting practices over the past decade, most lenders are now overcompensating and taking too little in the way of risks.\u00a0 Lenders are doing this so that on average their portfolio of loans adheres to a stated riskiness goal.<\/span><\/p>\n

     <\/p>\n

    The pressures described above will continue for some time to come.\u00a0 Because of the importance of real estate to the overall economy, the above scenario will also continue to provide downward pressure on gross domestic product (GDP).\u00a0 Sorry ’bout that.<\/span><\/p>\n

     <\/p>\n

    Jason<\/span><\/p>\n","protected":false},"excerpt":{"rendered":"

    Several weeks ago I wrote a post about the inevitable continued decline in home prices in a post dated 18 January, 2011.\u00a0 This morning the Wall Street Journal is reporting the results of its latest quarterly survey of regional home prices that confirms what I wrote recently.   Specifically, in all 28 metropolitan areas that […]<\/p>\n","protected":false},"author":2,"featured_media":0,"comment_status":"open","ping_status":"open","sticky":false,"template":"","format":"standard","meta":{"_et_pb_use_builder":"","_et_pb_old_content":"","_et_gb_content_width":"","footnotes":""},"categories":[3],"tags":[],"class_list":["post-3178","post","type-post","status-publish","format-standard","hentry","category-the-blog"],"_links":{"self":[{"href":"https:\/\/jasonapollovoss.com\/web\/wp-json\/wp\/v2\/posts\/3178","targetHints":{"allow":["GET"]}}],"collection":[{"href":"https:\/\/jasonapollovoss.com\/web\/wp-json\/wp\/v2\/posts"}],"about":[{"href":"https:\/\/jasonapollovoss.com\/web\/wp-json\/wp\/v2\/types\/post"}],"author":[{"embeddable":true,"href":"https:\/\/jasonapollovoss.com\/web\/wp-json\/wp\/v2\/users\/2"}],"replies":[{"embeddable":true,"href":"https:\/\/jasonapollovoss.com\/web\/wp-json\/wp\/v2\/comments?post=3178"}],"version-history":[{"count":0,"href":"https:\/\/jasonapollovoss.com\/web\/wp-json\/wp\/v2\/posts\/3178\/revisions"}],"wp:attachment":[{"href":"https:\/\/jasonapollovoss.com\/web\/wp-json\/wp\/v2\/media?parent=3178"}],"wp:term":[{"taxonomy":"category","embeddable":true,"href":"https:\/\/jasonapollovoss.com\/web\/wp-json\/wp\/v2\/categories?post=3178"},{"taxonomy":"post_tag","embeddable":true,"href":"https:\/\/jasonapollovoss.com\/web\/wp-json\/wp\/v2\/tags?post=3178"}],"curies":[{"name":"wp","href":"https:\/\/api.w.org\/{rel}","templated":true}]}}