A new CNN Money exclusive survey revealed that economists believe housing prices will continue to drop through the end of the year. Some economists included in the survey have even expressed a belief that prices will continue to drop through the end of 2012.
Experts Say Home Prices Still On the Decline
CNN Money surveyed 27 economists to get their take on the conditions of the economy as a whole for the remainder of 2011 and all of 2012. Those surveyed include economists at Brown University, Moody’s Analytics, Ameriprise Financial and Wells Fargo Securities.
Of those surveyed, all but three agreed housing prices would remain the same or continue to fall through the end of the year.
As for 2012, there was a bit more optimism. Six thought housing prices would continue to fall, two thought prices would remain the same and the rest projected an average 2-percent increase in prices.
As for what they thought could turn the housing market around, half said they were looking for improvements in the labor market. The rest felt that time is required to work through the inventory of foreclosed homes.
Is Now the Time to Buy?
If you’re in the market for a home, you may be wondering if now is the time to buy considering prices are still dropping. Depending on the price you pay for the home you purchase, you could be in danger of falling underwater for a while (meaning you owe more on the home than what it’s worth).
Some are suggesting that if you don’t already own a home, you may want to wait until the market bottoms out and instead rent a home for a while. Or you could consider purchasing a foreclosure or short sale, which means the price of the home could be reduced by up to 30 percent.
If you think you’ll be in the home for at least three years and purchase in an area that isn’t dropping as fast as other areas, you could consider buying even if prices are dropping in hopes that they will once again appreciate if the market rebounds.
As with any home purchase, it’s important to conduct careful market analysis to ensure you’re making the right decision. If you don’t feel the time is right, before tying yourself to a situation that may not benefit you, it’s good to wait a while and keep researching.
