Recent analysis shows that home values are expected to fall another 3.5% by June 2012. This will push them to a new low of 35%. Below the peak reached in early 2006. Thus....the dreaded triple-dip.
Sharon Rollins of Keller Williams in Studio City sees several factors that will come in to play in the coming months. There will be an increase in foreclosures and the continued high unemployment.
This, the third and lowest dip since the bubble burst in 2007, when prices fell to 31% below the peak. The First Time Homebuyer Credit helped sales pick up by mid-2010. By the time the credit expired, prices dipped again.
Earlier this month we saw the first quarterly increase in foreclosure filings in three quarters and new default notices were up 14%.
Now we are hearing about the "shadow inventory" of homes in foreclosure that will soon be going back onto the market. Economists say that there are nearly 6 million homes currently in shadow inventory.
We see a slow recovery ahead, says Sharon Rollins of Keller Williams in Studio City.. If these foreclosures flood the market at the same time, this will drive the prices lower and that's the big concern.
Even after the housing market begins it's comeback in mid-2012, it will be modest at best.