We will no longer see great decrease in home values; however they are still gradually decreasing. From January to November there was a 1.9 percent drop in home prices resulting in a loss of $489 billion. This is not so bad considering the loss last year of $3.6 trillion, which is a 12.8 percent drop.
Currently, the average price of a home in the United States is around $190,000. Almost the same amount it was six years ago. These low prices will give an opportunity for standby home buyers to take advantage of the low prices and generous tax credits.
The housing market is known to be an indicator of where the economy is headed. Although housing prices are dropping, our economy has not fully recovered. Christopher Thornberg, the principal of Los Angeles’ Beacon Economics, stated that the stability we are getting in the real estate market is due to government intervention and the lifespan of this recovery may be very short. For example, some of the government programs have expiration dates, which set a limit on how many individuals will be able to take advantage of the offer.
Due to the loan modification programs made available, the number of foreclosure proceeds has decreased this year. An estimated 3 million foreclosures will take place next year. What government assistance programs will become available to those in foreclosures next year? If that estimate does not follow through, then there is nothing to worry about. On the other hand, if the estimate becomes a reality our economy will take on yet another devastating toll. As for the housing market, prices will drop, but not to the extreme amount we witnessed this year.
Contributor, designer & admin for JohnHart Gazette.
1 comments