Oswald Acted Alone and We did Land a Man on the Moon!!
We believe that things are usually as they seem. We are not the type of organization that believes in conspiracies. However, there is something interesting in some of the housing price studies we are seeing in our research. It seems that some of the groups making the predictions are the same ones that have the greatest power to affect the prices they are projecting.
Most housing analysts warn that the heaviest downward pressure on prices will be created by distressed properties and the speed at which they will be released to the market. Research shows that ‘short sales’ sell at a 20% discount and foreclosures sell at a whopping 40% discount. Obviously, when and how much discounted real estate enters the market will have a major impact on prices of surrounding properties.
We are now seeing that a certain segment of those projecting future pricing have two things in common:
- They believe prices will fall rather dramatically in the first half of 2011
- They have control of the flow of discounted properties to the market
Predictions for the first half of 2011 by firms that fall in the above category:
- Bank of America projects that prices will fall 3.7%
- Fannie Mae predicts that median prices will drop $12,500
- Wells Fargo reported that they feel home prices will drop 8%
Not a coincidence
We are beginning to realize this is not a coincidence. The organizations which should best know when the surge of foreclosures will be released are saying house prices will be hit the hardest in the first half of the year. We are not asserting that there is anything devious in what we have found. We are just reporting that those who have control over the flow of distressed properties must think/know that inventory is about to be released. Why else would so many of them be predicting a sharp decline in home values in the next 120 days?
If you currently have your house on the market and are hoping that you will see a better price after the snow melts or the temperature warms up (aka Spring), BE CAREFUL! Those in the know are warning you the best price might be attained TODAY!