If you’re wondering whether to do a short sale on your home in San Diego now or to wait it out while the economy and home prices improve, here’s the latest opinion from economist Robert Shiller, creator of Standard & Poor’s Case-Shiller Home Price Index.
“I’m worried still about the risk of a double-dip,” Shiller said in a recent interview over the latest results from the S&P Case-Shiller 20 City Home Price Index. Today the Index reported a 0.5% dip in home prices in March compared with February prices – and that dip occurred during the frenzy to buy homes before the $8000 federal tax credit expired. It also marked the 6th straight month of declines, pointing to a trend.
Other economists agree that housing prices might be in for a further decline – at least until the end of 2011. IHS Global Insight economist Patrick Newport forecasts prices will fall an additional 6 percent to 8 percent and bottom in the third quarter of next year. He said the glut of homes on the market is the main reason, but he’s also worried about the rate of foreclosure. For months, many in the housing industry have been waiting for the banks to release their supply of “Shadow Inventory” onto the market, which could result in further price declines.
While the economy seemed to be improving over the last couple of months, economists point to weak job growth, tight credit and many more foreclosures ahead. In addition, the stock market is again plummeting, down to below 10,000 over worries about the debt crisis in Greece and other European nations, as well as tensions between North and South Korea.
Meanwhile, consumer confidence is up. A separate report Tuesday showed consumer confidence rose in May for the third straight month as hopes for job growth improved.
Tags: double dip, Foreclosure, San Diego, Short Sale