Home Prices Lowest since 2002

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What is the true sign of real estate in today’s market?

An index of home prices in big metro areas has reached its lowest level since 2002, driven down by foreclosures, a glut of unsold homes and the reluctance or inability of many to buy. Many economists think prices nationally will drop at least 5 percent more by year’s end.

Prices fell from February to March in 18 of the metro areas tracked by the Standard & Poor’s/Case-Shiller 20-city index. The nationwide index fell for the eighth straight month.

After adjusting for inflation, the home-price index has sunk to a level not seen since 1999.

“Folks are having so much difficulty in getting financing for a home,” said Mark Vitner, senior economist at Wells Fargo. “It may be early next year before prices hit bottom.”

Another obstacle to prices: A delay in processing foreclosures. Homes in foreclosure sell for, on average, 20 percent discounts. When they do, they pull prices down further.

The housing sector is struggling even as the overall economy is in the midst of a steady but slow recovery.

But housing also affects the broader economy. Homes account for about a third of household wealth. So when prices fall, they have “important spillover effects on other sectors of the economy,” said Yelena Shulyatyeva, an analyst at BNP Paribas. Those sectors include consumer spending and state and local property tax collections.

An article by
By DEREK KRAVITZ – AP Real Estate Writer stated that

Read more: http://www.bradenton.com/2011/06/01/3237915_p2/home-price-index-at-lowest-since.html#ixzz1PGSNZmtg

Existing Home Sales Ease (Click Here)

Please contact us, Marie Avery and Terri Ayers, at 941-358-1818 or email Homes@AveryAndayers.com if you have any questions about our Florida Real Estate market.

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