We attempt to keep you abreast of the housing market. When will demand for housing return to historic averages? What impact will foreclosures continue to have? Where are interest rates headed? There are no simple answers to any of these questions. However, the most difficult question to answer seems to be: Where are home prices headed? Yesterday, we read two vastly different opinions on this issue.
Clear Capital claims prices seem to be stabilizing in their most recent Home Data Index Market Report.
“The latest Market Report results through May suggest that home prices are starting to ease back from the heavy declines seen over the winter. We are still far away from the strong demand needed to fully turn things around for the housing market; however, it is clear from the initial spring sales data that prices are softening, suggesting stabilization in the market.”
At the same time, Housing Wire reported that Robert Shiller, the Yale University professor and co-founder of the S&P Case-Shiller Home Price Indices, believes home prices still have a major correction ahead.
“While other people expect home prices to bounce along the bottom for a while without going up much, Robert Shiller is inclined to be more pessimistic.
There is room for home prices to decline another 10% to 25% in real terms over the next five years, according to Shiller.”
As we said before, there are no easy answers to the tough questions facing the current housing market. We will try our best to keep you abreast of what reputable sources are reporting and at the same time try to explain the indicators they use to formulate their opinions.