Moody's Pegs Nationwide Home Price Drop at 36%
New York-Moody's Economy.com predicts that the value of homes nationwide will be more than a third lower when prices bottom out late this year.
Specifically, Moody's predicts that the housing market will find a bottom by year-end and that home values will be down 36% from their national peak in 2006.
Mark Zandi, chief economist of Moody's economy.com, said, "Notwithstanding the intensifying economic gloom, the bottom of the housing downturn is within sight for the nation."
But even Moody's prediction for a bottom has a contingency. Mr. Zandi said that "strong action by policymakers" is needed to support the economy and ensure that prices begin to recover by the end of this year.
Currently, Moody's says that home prices have already fallen about 25% from their peak. Overall, Moody's believes prices will fall another 11% before they start to stabilize.
"Policymakers have not yet been able to break the downward spiral that has developed among the sinking housing market, job losses, frozen credit markets, and rising foreclosures," Mr. Zandi said.
While the pain will not be spread evenly, Moody's says it will be widespread, with 62% of the nation's metro areas seeing double-digit declines in home values. Declines will exceed 20% in about 100 of the nation's 381 metro areas.
And the hardest-hit areas, including southeast Florida and California's Central Valley, are expected to see home prices fall by more than 50%.
Separetly, Zillow.com reported that Home Values fell almost 12% nationally in 2008.