Daily Real Estate News | December 6, 2006
Analysts:
Stats Don't Reflect Falling Home Values
Statistics that say housing
prices have continued to rise modestly or have fallen only slightly are deceiving,
say some real estate analysts, because the stats don’t reflect houses that
sit on the market for months because their owners refuse lowball offers.
Real estate professionals report residential price drops of 10 percent to 15 percent in the Boston area, suburban New York City, Portland, Ore., and northern Virginia, among other markets.
While these drops benefit buyers, economists are concerned that declining values leave homebuyers who bought at the peak underwater and are particularly damaging for those who bought with no down payment.
Many more households will fall behind on their mortgage payments and won’t be able to bail themselves out by refinancing or selling their homes, says Mark Zandi, chief economist of Economy.com.
At worst, this could be the start of something bigger, Zandi says. The housing slump of 2006 could be “the most significant threat to the global expansion” among current economic issues, he says.
Source: The New York Times, David Leonhardt (12/06/2006)