Double dip in housing already here?
That's the verdict of Toronto-based Capital Economics.
In a report entitled "Double Dip Begins," the firm contends the latest housing downturn kicked off when the home buyer tax credit went poof on April 30th.
Writes Paul Dales of Capital Economics, as cited in this HousingWire story: "The expiration of the homebuyer tax credit at the end of April has triggered a double-dip in the housing market, with new home sales falling particularly sharply in May," he writes. "The only reason why existing home sales did not fall significantly is because they are measured at the contract closing, rather than signing stage."
The big culprit, according to Capital Economics, is shadow inventory.
The number of distressed homes that have yet to it the market has increased to 7.8 million, nearly double the 3.9 million homes officially on the market.
That's about two shadow inventory homes waiting to hit the sales block for every home on the market, the firm notes.
It is likely to take years to clear out this inventory, weighing down home prices for some time to come.
