Both real estate professionals and homeowners soured on the direction of home prices in the third quarter and nearly half of the 1,100 professionals participating in a new survey by HomeGain expect prices to fall over the next six months.
Forty-eight percent of agents and brokers and 33 percent of homeowners think that home prices will decrease over the next six months. This reflects an increase in the percentage of real estate professionals and homeowners who expect a decline in home prices from the second quarter HomeGain home prices survey. In that survey 33 percent of agents and brokers and 23 percent of homeowners expected home prices to decrease over the next six months. Forty-two percent of homeowners, real estate agents and brokers think that home prices will remain the same in the coming six months.
Only 10 percent of real estate professionals and 18 percent of homeowners expect home values to increase in the coming six months.
After existing home sales fell a record 27 percent in July, inventories reached more than a year’s supply. A survey of agents released yesterday by Campbell Communications/Inside Mortgage Finance found that prices held steady in August, but the rising inventory brought about by diminishing demand following the expiration of the homebuyer tax credit April 30 is expected to put pressure on prices. The National Association of Realtors will release existing home sales data for August this Thursday, September 23.
The HomeGain survey found that most homeowners putting their homes on the market continue to value their homes more than agents recommend. Seventy-nine percent of homeowners continue to believe their homes are worth more than the recommended agent listing price, up from 77 percent last quarter.
On the other hand, sixty-nine percent of surveyed agents and brokers indicated that their home buyer clients think homes for sale are overpriced, up from 61 percent last quarter.
HomeGain, the first company to provide free instant home valuations online, announced the results of its nationwide 2010 third quarter home prices survey based on the responses of over 1,100 current and former HomeGain members and 2,600 homeowners.
Home prices will definitely decline further. I predict another 20% to 30% decline. See my blog post: The Truth About Home Pricesn. The graph in the post clearly shows that, based on historic norms, as of July 2010 homes are priced a tiny bit above the historic price to income ratio. This means that if home prices were to rise from the July 2010 level the price to income ration would be back in bubble territory.
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