Home Prices Falling…Falling…Falling – September 16, 2010
We’ve talked about it before. We’ll probably talk about it again. Recently I read an article on CNBC.com that discussed the ever-growing trend of falling home prices. People knew that the expiration of the home buyer tax credit earlier this year, coupled with the increasing number of foreclosures, would almost certainly result in home prices taking a hit.
Prices have been in recovery mode since last fall, and for a short time, there seemed to be light at the end of the tunnel. The problem? It was artificial light. Prices were benefiting earlier this year due to a bump in confidence in the housing market that was largely due to the $8,000/$6,500 home buyer tax credit incentives. Additionally, for a short time it seemed as though the amount of foreclosures was in decline. Unfortunately that was also a bit misleading. Banks were merely delaying the process as they attempted to get as many borrowers as possible into what we now know was an unsuccessful government-backed mortgage modification program.
By and large, home buyer confidence is still struggling. And the number of homes for sale far exceeds the number of buyers looking. A report out recently showed that for the third straight month nationally, the percentage of sellers on the market who have reduced their asking prices at least once has increased. We’ve said it before…we’ll say it again. Buyers are looking for great houses and great deals. The houses that are selling are attractively priced, they are in attractive areas, and/or in near perfect condition.