Home prices to drop another 5 to 10 percent?
Calculated Risk is running with that estimate, which it ties to the rising number of unsold homes sitting on the market.
The big news buried in real estate numbers just released locally and nationally isn't the fact that home sales rose in May. Everyone knew that was coming - these were homes put under agreement back in spring during the short-lived sales frenzy leading up to the expiration of the home buyer tax credit in April.
Rather, the big news is the rise in unsold homes sitting on the market. Nationally, there is 8.3 months of supply sitting on the market, a number that is significantly above normal. In fact, anything over six months and prices are typically falling, under six months, and they are rising, Calculated Risk points out.
And we could be looking at a backlog that hits the double digits again - ratcheting up the downward pressure on home prices, the blog notes.
It's a trend that is already well underway here in the Bay State.
The number of unsold homes declined in Massachusetts for well over a year right up until March. Since then, they have started to rise again, with inventory levels edging up again in May for the third straight month of increases.
At 8.6 months of supply, we are actually a bit above the national average.
And concern over falling home prices now appears to have gone mainstream.
