Double Dip in Housing Predicted After Third Straight Price Drop
December 29, 2010
(ChattahBox Business News)–Consumers were out in record numbers this holiday season swamping malls and retails stores. And manufacturing is on an upward swing, pointing to a more positive economic outlook for 2011. But the high unemployment rate and the continued drop in housing prices, portends trouble ahead. According the the Wall Street Journal, the third straight month of declining housing prices points to a double dip in the housing market.
Small gains made in the housing market may soon disappear under the weight of a runaway price drop.
“Home prices across 20 major metropolitan areas fell 1.3% in October from September, the third straight month-over-month drop, according to the S&P/Case-Shiller home-price index released Tuesday. Many economists expect the declines to continue into at least next spring, erasing most of the gains made since prices bottomed out in early 2009.”
“The housing market, which appeared poised for a recovery earlier in the year, now could be heading for a second downward drift.”
“This looks like a double-dip [in housing] is pretty much on the way, if not already here,” said David Blitzer, chairman of the Standard & Poor’s index committee. “Somebody who thought last year that it’s going to be straight up from here was wrong.”
With the foreclosure crisis bringing down demand and foreclosed homes being sold at sharply reduced prices, the housing market is not expected to show signs of recovery in the near future.
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