If you’re a realtor or you work in real estate in some other capacity, then you might be forgiven for thinking that the state of housing markets couldn’t get any worse than it is now. Well guess what? Officially, housing markets are in the worst shape they’ve ever been, so don’t underestimate your pessimism too quickly now.
Data from the latest Case-Shiller Index shows that home values have dropped by 33%, or a third, since the housing crisis first began in 2006. During the Great Depression, we might remind you, home prices fell by ‘just’ 31%.
The study was co-authored by Paul Dales, a senior economist with the Toronto-based Capital Economics. Talking about the depressing numbers he pinpointed, he said, “The staggering drop in residential property prices in the first quarter of 2011 confirm that the current housing crisis is much worse and spiralling out of control much faster than what we saw in the 1920’s.”
The worst news however is that Dales predicts that prices will continue to fall for some time yet before we see a rebound.
Talking to Fox News, Dales said, “But even when prices stop falling, we won’t be seeing many sustained increases for a while.” Instead, Dales predicts that once prices bottom out what we will see is a period when the housing market doesn’t move much at all.
Rising unemployment, a flood of new inventories and the difficulties many are facing in trying to obtain finance has seen home prices continue to tumble, with prices falling 1.9% in the first three months of 2011, say Case-Shiller.
“The only piece of comfort we can take is that the rate at which prices are falling has started to slow down a little,” said Dales. “But despite that, we can expect a further 3% fall by the end of this year, meaning a total 5% drop in home prices for 2011.”