US House Prices: Worse Now Than During Subprime Crash

Friday, June 3, 2011
By Paul Martin

EconomyWatch.com
02 June 2011

Just when you thought the US housing market was recovering, S&P/Case-Shiller house price index fell by 4.2 percent in the first quarter of 2011, the lowest its been in 8 years.
Capital Economics says the latest double-dip in housing should come as no surprise. It’s very much following a pattern seen in the early 30s, when a brief recovery also petered out. The same has also happened in other big housing busts around the world, the think-tank says. It believes prices are going to fall even further before we hit rock bottom, maybe sometime next year according toMarketWatch.

Just when you thought the US housing market was recovering, S&P/Case-Shiller house price index fell by 4.2 percent in the first quarter of 2011, the lowest its been in 8 years.
Capital Economics says the latest double-dip in housing should come as no surprise. It’s very much following a pattern seen in the early 30s, when a brief recovery also petered out. The same has also happened in other big housing busts around the world, the think-tank says. It believes prices are going to fall even further before we hit rock bottom, maybe sometime next year according toMarketWatch.

Bloomberg reports:

A backlog of foreclosures poised to reach the market means prices may stay depressed, dissuading builders from taking on new-home construction projects. Unemployment at 9 percent and stricter lending conditions are signs that any recovery in housing may take years.

“With the foreclosure pipeline still full to bursting, it’s hard to see this downward pressure on prices abating,” said Paul Dales, a senior U.S. economist at Capital Economics Ltd. in Toronto. “I wouldn’t be surprised to see prices continue to fall this year and maybe into next year.”

The Rest…HERE

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