Will homes go down in 2007?

Answer 1

Historically they never have, during a government run by Democrats. Not that I am Republican either. Just citing Historical figures from several reports.

Answer 2

It will depend on the area, but for most of the United States, I believe the answer will be Yes.

The recent and ongoing collapse of subprime lenders is causing a lot of the "no money down" products to go away, at least for the majority of people who have been using them the last few years. By some estimates, and again depending on the area, these products have been used for as many as 15%-30% of home purchases in the last several years. Most of the people using these types of mortgages could not qualify under other, more stringent mortgage products (like a 15 year or 30 year fixed, with 10% or more down).

Take away 15%-30% of buyers in any market and what do you get? Economics 101: Less purchasers = less demand = lower prices.

This does not even take into account the numbers of people who will soon be foreclosed upon due to resets in their ARM's, who can no longer refinance due to slowing home prices. This situation could make matters worse.

However, some areas of the country that have not had the kind of appreciation certain "bubble" markets have had in the last 5 years probably won't fall much, if at all, depending on the local job market and whether prices match up with local prevailing wages. The "bubble markets" (CA, Las Vegas, parts of AZ and FL) are probably going to see significant (but gradual) declines, similar to what was seen in CA in the early to mid 90's.

Answer 3

Remember the old fable. What goes up must come down. Well, this is more of a supply and demand issue, but..........

Consider the the current volume of homes currently on the market, and with more and more new homes, foreclosures, and re-sale homes being added each day. We have reached a surplus of homes available to be purchased. For a seller to sell quickly they will have to price their home below the market value. After awhile more and more sellers will be forced to do the same thing. Then, as a buyer, would you pay more for a house than what the home next door sold for.

The Fed is to blame, and they are the only ones that can do anything to fix it. If the Fed acts and lowers rates soon, more buyers will come out of the woodwork and prices would stay the same or increase a very small percentage. But, if they sit on their hands too long...................god only knows.

So, to answer your question: Yes, because the Fed is made up of a bunch idiots trying to conquer inflation instead of maintaining growth.

Answer 4

I agree with jschreur, but I think the severity depends on where you live. I'm in Southern California, and the answer here is a resounding YES. Check out the link below for statistical evidence that current prices are the result of speculation, not fundamentals.

Just use common sense. Home prices double (or triple in some places) in just five years; salaries are flat or declining after adjusting for inflation. Do you really think that is a stable situation? Of course the realtors will tell you it is.

Answer 5

In some areas probably. The Midwest seems vulnerable with the continued loss of factory jobs (of course they never went up much in lots of Midwest areas). Some areas got over heated (like Naples, FL) and may pull back.

In other areas with growing economies and where housing never saw the large gains should continue to do OK. Like the South outside of some coastal area (FL?) employment should support house prices.

It is all about location, location, location.

Answer 6

Yes. The foreclosure rate is up 73% from last year in the state where I live. Supply and demand. Lots of home, few buyers = low home prices.

Answer 7

If you listen to the media we will all be living in cardboard boxes and beggin for soup by the end of this year...

However its all illuison. Sure the market is as hot now as other times in history, but thats normal. The market will be back on track by this time next year...

Answer 8

Yes.

The number of foreclosures is booming due to the subprime market crash.... add that to the fact builders have been over populating the US with houses and what you come up with is WAY more supply than demand. Your home may not decrease in value, but it will not increase in value much over the next few years.

http://www.helium.com/tm/226327

Answer 9

Actually I am hearing that homes will be stabalizing in the middle of the year and will go on from there, thats why there are so many foreclosures.

Answer 10

as a Realtor i will have to agree with Jim and Iceman.