Homes will continue to lose value in 2009, but not as rapidly as this year in the over-whelming majority of real estate markets throughout the U.S., according to a new annual national forecast by Housing Predictor, a real estate market research firm. The annual national forecast projects the average amount of appreciation or deflation for the nation's markets as a whole.
The forecast is the highest since home deflation became rapid more than two years ago. But not all housing markets will suffer from long lasting deflation and some will experience relatively little loss in values, the company says.
The annual Housing Predictor forecast is based on studies in more than 250 local housing markets Housing Predictor forecasts in all 50 states. The decline in home prices has been running at the highest rate since the Great Depression in the majority of markets, but is expected to slow sometime in 2009.
An epidemic of foreclosures triggered by adjustable rate mortgages resetting and slower home sales has produced an onslaught of inventory in most housing markets. Many markets are seeing as many as 40% of the sales that close from foreclosed properties. However, as a result listings marketed for sale are slowly eroding as other homeowners take their properties off the market after failing to sell at higher prices. The inventory of homes has peaked, indicating one of the first signs of stabilization in the majority of markets.
More homeowners on the brink of foreclosure may receive aid since the Treasury Department is reportedly working on a plan as part of the bailout program.
The credit crisis which has tightened the lending pipeline on new home purchases, refinances and lending for business has begun to show signs of loosening after Congressional legislation was approved in the $700 billion bailout. New home mortgages and refinancing should become more readily available to borrowers in the next few months.