With a vast oversupply of housing for sale, U.S. homes prices keep falling. And in many markets, half the sales are foreclosures or short sales, meaning owners have to write-off their equity and lenders have to write-off a portion of their mortgage amounts to complete a sale.
All the sales prices are pressured downward by the abundance of foreclosures and short sales. And prospective buyers must now meet harsh lending requirements to get mortgage money to buy. Meanwhile, with so many homes available at less than replacement cost, builders have great difficulty selling new homes, so new starts have declined sharply.
According to the U.S. Commerce Department, construction of new homes and apartments fell 10.6% in April compared to the prior month and home starts fell a stiff 23.9% from April a year ago.
As a 35 year real estate investor, I don't believe prices will hit bottom until next year at the soonest. And in the months to come, they will lose 10 - 20% more of their value. On a $500,000 home, that is $50,000 to $100,000 in value lost. If you must sell, please consult your local real estate professional, but price to sell now before values fall even further.
Dick
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