In a time when the housing market really can’t afford to take much more bad news, it is being dealt another blow. According to an article on CNN Money Fiserv (A financial analysis company) says the value of homes on average across the country should fall another 3.6% by next June. This dip will bring prices to a new record low, averaging 35% below prices seen prior to the housing bubble burst in 2006. This drop will result in a triple dip in housing prices.
While there are a number of factors that will contribute to the predicted upcoming drop in housing prices, the increase in foreclosures reentering the market is at the forefront. After a scandal last year that scrutinized how forecloses were being handled, the processing of foreclosures came to a halt. Now that foreclosures are once again being processed, in many areas throughout the country there is a back log and with so many entering the marketplace at the same time, housing prices are set to take another dip.
The first dip took place in 2006 when the housing bubble burst and home values began to plummet. The second dip took place after a federal initiative to encourage potential home buyers to purchase homes ended (the first time homebuyer’s credit). The predicted third dip is expected to take place starting now and should bottom out in June of next year.
Fiserv did say that after prices bottom out next June, we should see the housing market begin to rebound. The recovery is predicted to be snail’s pace and prices may climb slightly over 2% from June 2012 through June 2013. While this is the average there are some areas where growth is expected to be better and some locations could even see soaring home values in the double digits.
Areas expected to fare better than average growth include Madera, California, Carson City, Nevada, Yuma, Arizona and Farmington, New Mexico. Some of these areas were hard hit from the housing market drops and are expected to bottom out with housing prices being over 50% lower than they were previous to 2006.
Will this be the final fallout? That is certainly a question that many people want to know the answer to. At this point, we will just have to wait and see. If you have been waiting to purchase your first home or find the perfect home for your retirement, this may be the time to find a bargain of a lifetime.