An already struggling housing industry did not get good news this week, hitting a new all time low since the housing bubble burst. Housing prices dipped to record lows with prices falling 4.2 percent during the first quarter of the year. While some cities saw prices slump to the lowest levels in eight years, others were hit even harder with prices dropping to levels not seen since 2000. Analysts have even said that the housing slump is now worse than the great depression.
Attributing to the dip is the high number of foreclosures currently on the market in cities across the nation. With more foreclosures expected to hit the market throughout the remainder of the year it seems prices may surge even lower. High unemployment is also a contributing factor. Additionally, many who want to be home buyers are choosing to rent for fear that once they invest, the value will drop. Finally, tight lending standards are also keeping some potential buyers out of the market.
While housing prices had started to creep up a while back, they have now dipped back down, creating a double dip recession. According to an article in The Washington Post, The Standard & Poor’s Case-Shiller index revealed the following:
The report included prices in 20 major metropolitan regions and found that that index fell 3.6 percent in March from a year earlier. Prices slipped in all areas except Washington, where they rose 4.3 percent, buoyed by the region’s strong job market. By contrast, 12 metro areas fell to new lows, led by a 10 percent dip in Minneapolis.
The 20-city index had peaked in the second quarter of 2006, when the housing market sizzled. It bottomed out in April 2009, started climbing again in early 2010 and has now dropped below the 2009 low.
So when might housing prices rebound and what does the double dip mean to the American economy? According to the article, the outlook is grim at best. Until the foreclosed homes stop coming on the market and the inventory starts to deplete, housing prices will most likely continue to fall. As for the overall economy, simply put a full recovery will not be reached until the housing market becomes stable.