The continuing foreclosure crisis is fueling concerns about another drop in home prices. According to analysts at Barclay’s Capital, there are as many as 4,000,000 loans either in some stage of foreclosure or at least three months late. How fast those foreclosed homes hit the market, and at what price, will have a large role in determining how quickly the housing market recovers. Government programs aimed at stoking sales and slowing the rate of foreclosures had some success in stabilizing the market earlier this year. But now that many of those programs have expired, the remaining inventory poses a potential risk for home prices. Dean Baker, co-director of the Center for Economic and Policy Research, predicts home prices will fall further. He feels the market should be allowed to dictate how low prices drop, rather than having a gradual decline aided by government intervention. More here and here.
Theresa Springer’s Blog
Home Prices and The Foreclosure Crisis
September 13, 2010
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