According to Robert Shiller, Yale professor of economics the housing market is in for more losses, citing “unusual factors” that he said influenced the outlook for the housing market.
Unusual factors …
During the real estate boom, people stopped regarding homes as homes, and considered them investments in land. The real estate boom turned into a collapse that is bigger than the collapse of the Great Depression. Shiller links the collapse to people mistaking investments in homes for investments in land.
He said that predicting housing prices is impossible because the current situation is unprecedented with nothing to compare, but he wouldn’t be surprised if home prices dropped another 10% to 25% — beyond the 30% that home prices have already dropped.
A full-fledged double dip in home prices was confirmed by the Case-Shiller Index at the end of May 2011.
Millions of borrowers are not current on their mortgages. When these people hit the foreclosure pipe, a glut of properties will hit the market and plague the market for years.
Buyer demand is hindered by fear, tight credit and underemployment.
See also …
Scares me that soon a Ford Focus will cost more than a house. Good lord.