2012 and 2013 Residential Forecast

March 17, 2013 in Blog

A recent report by Barclays Capital indicates that a “triple dip” in home prices will likely occur by early 2012. The term “triple dip” also emerged in a Clear Capital report sometime ago. Barclays estimates that home prices will slip another 6-7 percent over this winter. This would put home prices a full 3 percent below the “double dip” low of last spring.

Barclays goes on to estimate that home prices will rise slowly after this triple dip occurs. “Long run home price measures suggest that prices are close to equilibrium” and they are estimating the bottom of the market after this triple dip occurs.

Delays associated with foreclosures have, for the moment, prevented an overcorrection in home prices by limiting the amount of REO inventory on the market.

REO inventory levels are still elevated with close to 4 million homes seriously delinquent or in foreclosure. The glut of foreclosed homes in the pipeline should eventually cause REO supply to far exceed REO demand. This supply-demand imbalance could remain well into 2013 and 2014 according to the research firm. Barclays says price gains will be constrained by the amount of REO supply that will be placed on the market in the next few years. At the same time demand for these homes will be “highly dependent” on the state of the economy, Barclays stressed. (source: Carrie Bay, DSNews.com)

You can track the current number of REO properties in the Tri-Lakes MLS on our Real Estate Portal: http://www.cooperappraisal.net/portal.html