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September 28, 2010: Case-Shiller Index Shows Home Prices Improved In July According to the Standard & Poor’s/Case-Shiller 20 City Index released today, real estate prices ticked up a bit for July from June. For the 20 cities measured in this index, nationally prices have risen nearly 7 percent from the bottom in April 2009; but they still remain almost 28 percent below their July 2006 peak.
Unfortunately, many analysts are predicting that prices and sales volume will decline, perhaps significantly, in many major markets well into next year. They base this on two considerations: 1) the peak home-buying season has now ended, after a less than inspiring summer; and 2) They expect an increase in distressed sales (foreclosures and short sales) from the already elevated level we are now witnessing. It is projected that this year there will be about 2 million distressed home sales, about 41 percent of the total market; it is projected that next year that will increase to 2.4 million, about 45 percent of all sales. Furthermore, many are projecting that distressed sales will make up at least 25 percent of the market for the next four years; typically distressed sales only account for 6 to 7 percent of annual sales.
Based on this, many analysts are projecting that prices will be weak for a while, and that it might even be a few years before prices stabilize.
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