You Want Fries With That 2-Bedroom Condo?
Home prices could go even lower -- or not
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Ronald demonstrates how the housing market has deflated.
Have home prices hit rock bottom? Or will we eventually be able to buy a two-bedroom condo in Georgetown for the price of a Happy Meal?
Well, it depends on who you ask.
A recent report by mortgage insurer PMI Group said D.C.-area home prices will continue to stumble, and might even be lower in two years than they are now. Yes, the report predicted the downward spiral to continue into 2011.
The group said about 85 percent of the country's metro areas face increased risk of lower home prices during that time. Yikes. As for the D.C. region, that number climbed to 92 percent. The report blames significant increases in unemployment and foreclosure rates, of course. And as experts in mortgage insurance, there probably some solid numbers to back that up.
But then again, others have a more cheerful outlook, such as Kenneth Harney at RealtyTimes.com:
"... even the most bearish researchers now agree: Prices are bottoming out, even in some of the hardest-hit areas."
Really? Well that just flies in the face of the PMI Group's gloom-and-doom scenario.
What is he basing his prediction on? He gives his reasoning...
In its latest monthly survey, Standard & Poor's Case-Shiller index found prices up in a number of key markets: Dallas prices gained 1.7 percent, Denver 1.5 percent and other cities -- Washington DC, Seattle, San Francisco, Atlanta, Boston and Cleveland -- registered smaller increases.
So there you go. Two opposing views on a housing market that is still anyone's guess. Leave yours in the comments below.
