subject: Market Predictions For Home Prices [print this page] With the housing market having taken a huge hit since the sub-prime mortgage crisis, all eyes are looking to the US housing market for signs of recovery. It however, seems that house prices in America haven't yet leveled out meaning that we have some way to go yet before we see an increase.
One contributing factor to the low costs is high unemployment. With high unemployment, much of the population just does not have the finances to spend money and purchase houses, something that will always have an adverse impact on any market. With house prices already low, spending and investment is required so as to push prices back up again, however until the money is available to spend and invest, this will not be happening.
Another aspect that's keeping house prices less is that there is a high inventory of vacant properties, and new properties are still coming onto the market. If there are many properties available for sale, then the high supply will outstrip demand resulting in a further dip. In market environments like the one we are in now, the buyer has larger influence and buyers generally would like to pick up a property at the best possible price for them. When a home owner is looking to sell their house then having lesser choices would mean that theyre more likely to have to accept a lower price. With more potential buyers, they will have more bargaining power and could typically hold out for a better price.
Before the market is to increase, it will initially have to find its bottom and stabilize. This would encourage prospective buyers who are looking to enter the market at the best possible moment so as to increase their future profits. It is unlikely that buyers would begin to get into the market any time this year, as the housing market is projected to continue to drop over the following few months or so. With some analysts predicting that home prices could drop by another 10 to 15 percent, we might see a substantial amount of downturn before we can expect to see things pick up again. Additional estimates claim that when the markets reach their bottom, it may take another 10 years for them to recover which means that it could be a decade before we saw the sort of housing market that we were seeing before the crisis.
Incentives such as the first time buyer tax credit have turned out not to be as successful as was hoped. Although sales figures increased during the period, it was found that instead of actually increasing the quantity of home sales, it just encouraged potential patrons to bring forward their purchase from later in the year.
With more foreclosures projected which would further increase the inventory of vacant buildings, a slow-moving economy and buyers still biding their time before purchasing, it could be a while until we see house prices rising again.
