Home prices fall, Triple dip plunge, 3.6 percent by next June, Foreclosure inventory, Naples FL hardest hit

Home prices fall, Triple dip plunge, 3.6 percent by next June, Foreclosure inventory, Naples FL hardest hit

From CNN money October 31, 2011.

“Home prices heading for triple-dip”

“The besieged housing market has even further to
fall before home prices really hit rock bottom.

According to Fiserv (FISV), a financial analytics company, home values
are expected to fall another 3.6% by next June, pushing them to a new
low of 35% below the peak reached in early 2006 and marking a triple
dip in prices.

Several factors will be working against the housing market in the
upcoming months, including an increase in foreclosure activity and
sustained high unemployment, explained David Stiff, Fiserv’s chief
economist.

Should home values meet Fiserv’s expectations, it would make it the
third (and lowest) trough for home prices since the housing bubble
burst.

The first post-bubble bottom was hit in 2009, when prices fell to 31%
below peak. The First-Time Homebuyer Credit helped perk prices up by
mid-2010, but by the time the credit expired, prices fell again.

In the second dip, which was reached last winter, prices were down
33%before staging a mild rally that was artificially spurred as banks
slowed the processing of foreclosures following the robo-signing
scandal, which found that loan servicers were rapidly signing
foreclosures without properly vetting them.

Now that the scandal is mostly resolved, lenders are speeding more
cases through the foreclosure pipeline and back onto the market,
weighing on home prices even further.

Earlier this month, RealtyTrac reported the first quarterly increase
in foreclosure filings in three quarters. Even more discouraging: new
default notices were up 14%.

There’s also a “shadow inventory” of homes in foreclosure that have
yet to go back onto the market.

The specter that those foreclosed homes could flood the market at any
time and drive prices significantly lower is a huge concern, said Mark
Dotzour, an economist for Texas A&M University. “That’s the elephant
in the room,” he said, noting that there are 6 million home currently
in shadow inventory.

Biggest losers
Many of the regions that will be hardest hit were already beaten up
during the previous two dips.

Naples, Fla., for example, is expected to take the biggest hit of any
metro area, a price drop of another 18.9% by the end of next June,
according to Fiserv. Home prices in the area have already fallen 61%
from the peak.

Other cities expected to be hit hard include the not-so-lucky Las
Vegas, which is expected to see home prices fall another 15.9% for a
total loss of 66%; Riverside, Calif., is projected to fall another
14.8% (for a total decline of 61%); Miami is expected to decline by
13.2% (total loss: 57%), and Salinas, Calif. could drop by another 13%
(for a total loss of 66%).”

Read more:

http://money.cnn.com/2011/10/31/real_estate/home_prices/index.htm?iid=HP_LN