Posted on Thursday, February 11, 2010
Finishing the year with five straight down periods, the IAS360 House Price Index was off 5.3 percent for the 12-month stretch. This relatively modest decline follows an 11.7 percent drop in 2008.
Now more than 22 percent down from its high-water mark set in July 2007, the index has fallen to a level last seen in mid-2004, IAS said.
“There’s something to be said for the fact that the decline has at least slowed,” said Dave McCarthy, president and CEO of Integrated Asset Services, “but I still think the risk of continued weakening in house prices nationally is considerable.”
Of immediate concern is the approaching end to several major government initiatives for the housing market, McCarthy said, not the least of which is the first-time homebuyer tax credit. While the incentive will likely result in additional sales through the first half of the year, McCarthy fears the program will wind down just as a new wave of distressed properties enter the marketplace. The combination of events could result in a pronounced “double dip” in home prices, McCarthy said, echoing the same ideas in a just-published study by Zillow.