Monday, March 23, 2009

Home Prices Nearing Bottom? Well, That Depends…

By C. Brown
Thomas A. Lawler is founder of Lawler Economic & Housing Consulting, LLC, which provides data, analysis, and forecasts of housing, mortgage, financial and economic trends to a select group of clients. Mr. Lawler worked for Fannie Mae for 22 years, before retiring as a senior vice president in 2006. He will be contributing regular posts on regional housing trends to the Developments blog.
There is a growing case to be made that home prices in many severely ravaged housing markets are actually very close to being at a bottom–if one defines home prices as including all transactions, including all distressed sales.
In a few especially battered markets, reported home prices have plunged to levels not seen in years, and home sales in some of those areas have skyrocketed. The bulk of those sales since last fall have been either foreclosure (bank REO) sales or short sales. In many of these markets, there has been a surge in investors buying homes, concentrating in distressed properties. In many cases, investors are putting down all cash to buy homes at what they hope are “fire-sale” prices.
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