U.S. housing prices will fall by a double-digit percentage from already beaten-down levels, resulting in an overall 40 percent plunge by the time foreclosures peak in the second half of 2010, Barclays Capital economist Michelle Meyer said.Funny how guys like Roubini were warning of this, oh, a year ago.
Meyer issued her forecast two days after the Standard & Poor's/Case-Shiller Home Price Indexes showed for April an 18.1 percent year-to-year decline, compared with 18.7 percent in March, in the rate of home price declines in 20 major U.S. metropolitan areas.The indexes have tracked the prices of U.S. single-family homes since 1987.
"While the early signs of improvement are in place for housing, the market will likely remain out of balance for some time, given the flood of foreclosures," Meyer wrote.
"Home prices are likely to continue to fall, albeit at a slowing pace, even after the economy technically emerges from the recession." Home prices have fallen 32.6 percent from their peak three years ago, S&P/Case-Shiller said.
On that basis, they would need to fall another 11 percent for an overall 40 percent peak-to-trough decline. Further declines could imperil metropolitan areas that have yet to experience the worst of the nation's housing slump.
Nice of Michelle to join the party, however. Still, it's telling to see this kind of article in the happy-face financial press, warning we still have another year of pain to go. Dow lost another 200+ points today on the unemployment news.
"Green shoots" my ass.
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