Home Prices Plunge In Big Cities

I expect a 10% decrease in home prices in 2011.

Declines are sharpest in big cities.

In 2011, there will be fewer people buying homes due to rising interest rates and high unemployment. At the same time, millions of foreclosed homes will be coming to market. When supply exceeds demand, price must fall for the market to balance.

U.S. home prices have fallen for four straight months.

The Los Angeles Times says:

This year is on pace to finish as the worst for home sales in more than a decade. High unemployment and tight credit have kept people from buying homes, despite some of the lowest mortgage rates in decades.

Government tax credits gave the ailing industry a boost this spring. But they expired in April, and in recent months, home prices have begun to dip again.

Millions of foreclosures are forcing home prices down. Many people are holding off on making purchases because they fear the market hasn’t bottomed out, analysts say.

Foreclosures likely will remain high for the next two years, said Mark Zandi, chief economist at Moody’s Analytics.

Several lenders temporarily halted action after evidence surfaced that some used flawed foreclosure documents to take people’s homes. Some banks have resumed foreclosures at a more measured pace.

About Luke Ford

Raised a Seventh-Day Adventist at Avondale College in Australia, Luke Ford moved to California in 1977. He graduated from Placer High School in 1984, reported the news at KAHI/KHYL radio for three years, attended Sierra College and UCLA, was largely bedridden by Chronic Fatigue Syndrome for six years, and converted to Judaism in 1993. From 1997-2007, Luke made his living from blogging. Living by Beverly Hills (Alexander90210.com), he now teaches the Alexander Technique (moving the way the body likes to move). Lessons cost $100 each and last about 45 minutes. In 2011, Luke completed a three-year teaching course at the Alexander Training Institute of Los Angeles. His personal Alexander Technique website is Alexander90210.com. Luke is the author of five books, including: » The Producers: Profiles in Frustration » Yesterday’s News Tomorrow: Inside American Jewish Journalism
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