No Duh! Housing Prices Could Drop Another 20%

Clear Capital in a recent press release has stated that house prices have declined 5.9% recently and are expected to continue declining. This really should come as no surprise to anyone, if it does, then that person is lacking in discernment.

"This special Clear Capital Home Data Index (HDI) alert shows that national home prices have declined 5.9% in just two months and are now at the same level as in mid April 2010, two weeks prior to the expiration of the recent federal homebuyer tax credit. This significant drop in prices, in advance of the typical winter housing market slowdowns, paints an ominous picture that will likely show up in other home data indices in the coming months. "

While some financial and real estate "experts" are calling this a double-dip, I simply see it has a continued downroad spiral. If housing prices recovered to what they were in 2006 and then dropped 10% or more again, then that would be double-dip.

Based on all the historical data about housing prices, the current evidence of many negative factors the most reasonable outcome is continued decline. This is what I have been saying on here all along, but yet people keep buying overpriced homes.

I am not saying that you shouldn't buy a home right now, after all there are some good deals out there if you know what you are doing. The fact is, the majority of people that are buying are paying way too much for their home and will be financially hurt. And I wouldn't be surprised if some of these same people that have bought over the past year end up end up defaulting on their mortgage in 2-5 years.

In this interview, Gary Shilling projects another 20% decline and underwater mortgages to go to 40%. I see no reason why this won't happen because it should, but the government and the FED, unfortunately for all of us will continue to meddle with the economy.

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