Go Back To Article List
Home Prices Touched New Low
Saturday, June 4, 2011
In 2011, home prices have once again declined to an all-time low. Experts have found that home prices have decreased 5.1% to make for the lowest prices in the past 9 years. These low prices have not been seen since 2002. Further, this drop has served as the third quarterly drop for the S&P/Case-Shiller national home price index. Overall, the S&P/Case-Shiller national home price index reveals that home values have declined 32.7% from peak values from a few years ago.
The S&P/Case-Shiller national home price index offers research on over 80% of homes in the United States. Experts are saying the most recent values show a "double-dip" in the declining prices of homes. Because of the homebuyer tax credits made available in 2009, the housing market was able to slightly recover. During this time, the market recovered about 5% of its losses. However, right after the tax credit program ended, the market continued to take a turn for the worse.
With such low prices, home sellers are having a tough time making it out alive in this market. Home sellers may want to find companies with mottos such as "we buy houses
" to get the best prices for their homes. In Minneapolis, in particular, homes have been hit incredibly hard. This city is cited as having the most rapidly declining home values. Sellers with homes in Minneapolis should try to sell homes through businesses stating "we buy houses
," because this will help them to defray their losses. Homes prices have been falling 10% in Minneapolis. In Chicago and Portland, prices have been falling 7.6%. In Phoenix, prices have been falling 8.4%.
Because many repossessed homes are in such terrible condition, they are having a dramatic impact on the value of other homes. These repossessed homes sell at a large discount and bring down overall values of the housing market.
New home construction has taken a halt, due to the decrease in overall values in the housing market. Builders simply can not compete with homes that are being sold for pennies on the dollar. Typically, construction plays a large role in the health of the economy. Right now, however, new home construction has a very limited role in the entire economy of the United States. Home construction also benefits the economy more than the sale of a new home. Home construction that costs $200,000 or $300,000 will add that exact value to the economy, while a new home sale may only add 4% or 5% of its value to the economy.