Home Prices Bottom Out?
PMI has released results of a new study suggesting we may reached the low point in housing prices. They base their conclusions on the fact that residential property values stabilized throughout the second, third and fourth quarters of last year. They claim that the likelihood of prices going lower is slim.
The closely watched US Market Risk Index measured 384 metro areas over a two-year period. It calculates such factors as market factors, employment, interest rates and several other economic factors.
What the rosy picture being painted should mention is that the risk of lower prices went down in 212 areas, but rose in 136. That means 35.4% of the country is more likely than previously to see lower housing prices. And the most likely prospects came as no surprise: Florida, California, Nevada and Arizona.
The study is an attempt to balance conflicting indicators: excess inventory vs. declining foreclosure rates, rising unemployment vs. increased affordability.
Who knows? Maybe even the study itself will impact housing prices, spurring on investor confidence. We’ll just have to wait and see.
