Have you ever gotten your hopes way up about something, only to have them shattered? Thought you were getting a new puppy for Christmas, and got one -- but it was stuffed? Multiply that infinitely and you'll begin to grasp what homeowners around America are feeling as they contemplate the latest news about home values.
Recently, a number of economists and prognosticators projected a housing market double-dip, essentially cautioning Americans that the apparent recovery in home prices during 2010 was temporary, and that prices are again on the decline and approaching their 2009 trough. These predictions seem more likely than ever to come true, in light of the housing data reports that came out last week.Last week's Standard & Poor's/Case-Shiller home price index reported a 4.1% decline in home prices during the last quarter of last year, when compared with the same time from in 2009. And Robert Shiller, the co-creator of the study, told CNNMoney.com that he believes "there's a substantial risk of home prices falling another 15%, 20% or 25% more."
slow haul until any deep, lasting recovery.
What's behind this double dip? Tax credits: the various homebuyer tax credits lifted prices effectively, but only temporarily, starting in the second quarter of 2009 and ending with the final tax credit expiration last Spring. Since then, prices have consistently fallen. "It's clear now that, going back to last fall, the apparent strength was a false strength," Brad Hunter, chief economist for Metrostudy, told CNNMoney. "Now that the tax credits are gone, we're back to where the training wheels are off, to normal consumer demand."
Home Values Headed for a Double Dip