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Sunday, May 08, 2011

WSJ: Home Market Takes a Tumble

by Calculated Risk on 5/08/2011 11:59:00 PM

From Nick Timiraos and Dawn Wotapa at the WSJ: Home Market Takes a Tumble

Home values fell 3% in the first quarter from the previous quarter and 1.1% in March from the previous month, pushed down by an abundance of foreclosed homes on the market, according to data to be released Monday by real-estate website Prices have now fallen for 57 consecutive months, according to Zillow.
[Stan Humphries, Zillow's chief economist] now believes prices won't hit bottom before next year and expects they will fall by another 7% to 9%.
Prices are decelerating in large part because the many foreclosed properties that often sell at a discount force other sellers to lower their prices.
As I noted on Friday, Fannie and Freddie sold over 90,000 REOs in Q1; a new record. These foreclosure sales are pushing down house prices - and there are many more REOs coming (I'll try to summarize all the house price indexes, but most are showing prices at a post-bubble low).

Schedule for Week of May 8th
Summary for Week ending May 6th
Total Fannie, Freddie, FHA REO inventory declined in Q1, Fannie and Freddie REO Sales at Record Levels