It appears that home values may have further to fall – a lot further, according to Yale economist Robert Shiller, whose name is attached to the Case-Shiller home price index.
In a conference call Tuesday discussing the new HPI, Shiller, noting a large backlog of foreclosed houses, the uncertain future facing Fannie and Freddie Mac, and new proposals to reduce the mortgage tax deduction, said he sees "a substantial risk" of declines of "15 percent, 20 percent, 25 percent."
The 20-city composite is currently off 31.2% from its peak. (See related story on the National Mortgage News website.) Some investors in nonperforming loan market anticipate at least another 10% decline in home values before the market truly bottoms.
Meanwhile, a new report from realty giant RE/MAX found that the median sales price of an existing home fell 6.6% in January to $178,017 from the pervious month. Compared to January 2010, prices are down 4.6%.
RE/MAX said existing home sales tumbled 28.5% in January from December on a non-seasonally adjusted basis, which is in line with historical figures.
On a year-over-year basis, homes sales are up 0.7%. "We're very pleased that sales this January are higher than last January, and we're hopeful that this indicates even higher sales this spring," said RE/MAX chief executive Margaret Kelly.
She pointed out that some of the hardest hit markets have experienced "exceptional year-over-year growth" in home sales with cities like Miami leading the way with a 29.5% jump. Other notable increases include Tampa (21.8%) Richmond, Va. (20.5%), New Orleans (16.9%) and Phoenix (16.5%).
