Modest Outlook for the Rest of the Year
By Venessa Wong
Homeowners and investors holding their breath after U.S. home prices made a double dip in the first quarter may still be left waiting to exhale. According to a report released today by data and valuation firm Clear Capital, five housing markets are likely to make modest gains in sale prices in the second half of 2011, including the resilient Washington, D.C., metro area. The firm tracked 50 metropolitan statistical areas for the report. While a few areas have regained their footing, many of even the country’s next best-performing metros are expected to see minor price drops. In the first three months of 2011, home sale prices fell 4.1 percent over the previous quarter and rose only 0.9 percent in the second quarter, according to Clear Capital estimates.
Still, it is unlikely that they have reached a true and sustainable bottom, because of high unemployment, poor consumer confidence, and the large number of bank-owned properties for sale, judges Clear Capital, which expects prices to fall another 2.4 percent in the second half of 2011. The good news? "The moderation of the projected price changes generally reflects a flattening market," states the report. Wild sales and price swings of the past two years—which resulted from temporary boosts from homebuyer tax credits—should level off, the firm predicts.
Still, it is unlikely that they have reached a true and sustainable bottom, because of high unemployment, poor consumer confidence, and the large number of bank-owned properties for sale, judges Clear Capital, which expects prices to fall another 2.4 percent in the second half of 2011. The good news? "The moderation of the projected price changes generally reflects a flattening market," states the report. Wild sales and price swings of the past two years—which resulted from temporary boosts from homebuyer tax credits—should level off, the firm predicts.
