Smile Politely

Local economist says housing market will likely get worse

 

I don’t think the housing market will bottom out until after the economy starts to recover. Until then, I think home prices will keep dropping, but how much is anyone’s guess. Prices have fallen 11.6 percent since a year ago, and 17.5 percent since the market peak in 2006. One in every five homes sold over the last year was in foreclosure, and an estimated one in six homeowners have negative equity — meaning they owe more on their mortgage than their house is worth. That’s why I don’t see this changing very quickly. … Even with the [pricing] decline, prices are still only down to 2004 levels so it’s not as though prices have simply collapsed. Champaign-Urbana has weathered the downturn much better because it didn’t have the spectacular rise beforehand.
– Housing expert Daniel McMillen, an economist with the Institute of Government and Public Affairs at the University of Illinois

 

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