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Home prices to keep falling?

Posted by Scott Van Voorhis March 21, 2012 06:39 AM

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That's the verdict from a Zillow survey of economists and real estate experts, just out this morning.

Home prices nationally will fall another .7 percent in 2012, revised downward from an earlier estimate of a negligible, .2 percent drop, according to Zillow's survey of 104 "economists, real estate experts and market and investment strategists."

Also taking a hit are rosier estimates of a rebound in prices in 2013, with the consensus forecast now calling for a 1.39 percent increase in home prices in 2013, compared to 1.75 percent previously.

The forecasts obviously iron out a range of responses - some individual forecasts were even more alarmist.

Economist Gary Shilling, the dean of the housing bears, expects home prices to fall another 8 percent in 2012.

OK, it's been a while since we've had a good dose of gloom - I've been in withdrawal myself given the relatively happier economic news of late.

So what's behind this new and darker outlook?

Basically a sharper than expected fall in the fourth quarter of 2011 in the vaunted Case-Shiller index, according to Zillow.

Go figure, but I guess it takes a while for these guys to react.

Still, with sales activity picking up, I wonder how much of a downer falling prices will actually be for the budding market recovery.

Yes, instability in prices has been part of the fear factor that has kept a stranglehold on the real estate market.

But the potential for bargains may now finally be drawing out buyers newly emboldened by a rebounding economy.

If anything, we could use a couple more downward adjustments in home prices here in Greater Boston.

After years of gingerly tiptoeing downwards, home prices have dropped just 18.6 percent from their peak in the Boston area, according to Redfin, citing Case-Shiller numbers.

Compared to the rest of the country, well that's not much.

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About boston real estate now
Scott Van Voorhis is a freelance writer who specializes in real estate and business issues.

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