In depth WSJ column that essentially states that there is more downside to come in Residential RE, and how many economists were fooled by the price action:
“Home values posted the largest decline in the first quarter since late 2008, prompting many economists to push back their estimates of when the housing market will hit a bottom.
Home values fell 3% in the first quarter from the previous quarter and 1.1% in March from the previous month, pushed down by an abundance of foreclosed homes on the market, according to data to be released Monday by real-estate website Zillow.com. Prices have now fallen for 57 consecutive months, according to Zillow.
Last year, the housing market showed signs of improving as price depreciation slowed in some markets and stabilized in others. In response, a number of economists began forecasting that housing would hit a bottom in late 2011, then begin to recover. But the improvements, spurred by federal programs that gave buyers up to $8,000 in tax credits, proved fleeting. Sales collapsed when the credits expired last summer, and prices in many markets have been falling ever since.”
The full article is definitely worth your time . . .
A Closer Look at the Second Leg Down in Housing (June 24th, 2010)
Home Market Takes a Tumble
NICK TIMIRAOS And DAWN WOTAPKA
WSJ, MAY 9, 2011