Home Prices Predicted To Continue Decline
RENEE MONTAGNE, host:
And there's more glum news about the critical housing market. A government housing regulator says in the 12-month period ending last November home prices dropped 8.7 percent. NPR's Yuki Noguchi has more.
YUKI NOGUCHI: By nearly every measure, all parts of the housing sector are sick. Builders aren't putting up new homes' banks aren't lending much; and there's a huge glut of homes on the market, pushing prices down further. And despite the low interest rates, few people are buying. The problem is especially pronounced in the West, which saw a huge run-up in prices and building in recent years. In the Pacific Coast states, including Hawaii and Alaska, the Federal Housing Finance Agency said prices fell more than 22 percent. In the Mountain states, including Nevada, Arizona and New Mexico, housing prices fell 9.1 percent in the span of a year.
Mr. RICK SHARGA (Senior Vice President, Marketing, RealtyTrac): There may still be more air in that balloon to let out.
NOGUCHI: That's Rick Sharga, senior vice president for a company, called RealtyTrac, that researches the housing market. He says foreclosures hit particularly hard in the Western regions. Overall, the foreclosure rate increased 80 percent in each of the past two years. That staggered even the biggest pessimists at his company. The expectation among Sharga and other market watchers is that this year, home-building will continue to slow, foreclosures will rise, and that home prices will, therefore, keep falling. To be an optimist in a market like this one is to expect the housing market to bottom out sometime this year, and then slowly start to recover. Yuki Noguchi, NPR News.