Home > Foreclosure alternatives > Clear Capital Reports Dramatic Change in Prices

Clear Capital Reports Dramatic Change in Prices

Clear Capital, a real estate valuation firm, issued a “market alert” Friday, saying they had seen a dramatic change in the market.

“Clear Capital’s latest data shows even more pronounced price declines than our most recent HDI market report released two weeks ago,” said Dr. Alex Villacorta, senior statistician, Clear Capital. “At the national level, home prices are clearly experiencing a dramatic drop from the tax credit-induced highs, effectively wiping out all of the gains obtained during the flurry of activity just preceding the tax credit expiration.”
This special Clear Capital Home Data Index (HDI) alert shows that national home prices have declined 5.9% in just two months and are now at the same level as in mid April 2010, two weeks prior to the expiration of the recent federal homebuyer tax credit. This significant drop in prices, in advance of the typical winter housing market slowdowns, paints an ominous picture that will likely show up in other home data indices in the coming months.
For example, both Clear Capital and S&P/Case-Shiller indices have displayed consistent market peak, trough, secondary trough, and tax credit run-ups. Despite these consistencies, a critical difference is that HDI’s patent pending methodology enables more timely and granular reporting. Therefore, if previous correlations between the Clear Capital and S&P/Case-Shiller indices continue as expected, the next two months will show a similar downward trend in S&P/Case Shiller numbers.
Here in Bergen County, we have seen prices start to stabilize in recent months, we haven’t although the supply and demand are still out of balance, making future price declines likely. In Bergen County, our real estate market hasn’t exactly mirrored the national market, but we have followed general trends. If this Clear Capital report is correct, we are likely to see the feared “double dip” before long.
For people who are looking to restructure their mortgages, a further drop in prices can be bad news, as it eliminates the possibility of refinancing.  Loan modifications may not be affected, but certainly short sales could be affected if market prices have fallen since the property was last valued by the lender.
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