Real Estate Market

Real estate professionals say home prices haven't hit bottom

by Broderick Perkins

(12/15/2010) Add real estate professionals to a growing list of forecasters who believe home prices will remain flat or continue to fall well into 2011.

Real estate information portal HomeGain, in it's 4th Quarter 2010 National Home Values Survey Results, reports 88 percent of real estate agents and brokers believe home prices will remain the same (48 percent) or fall (46 percent) for the next six months.

Homeowners were only slightly more optimistic with 48 percent believing prices will be unchanged and 30 percent saying prices will continue to fall.

The survey was culled from the responses of some 1,000 current and former HomeGain members and 2,300 homeowners.

The findings are not unlike forecasts by Fiserv and Moody's Economy.com and National Association of Realtors.

All forecast flat and falling home prices until at least mid-year with only a gradual recovery later in 2011.

HomeGain also found a disconnect between real estate agents and buyers and sellers.

• Sixty-nine percent of surveyed real estate professionals indicated to HomeGain that their home buyer clients think homes for sale are overpriced, unchanged from 69 percent last quarter.

• Seventy-six percent of home owners continue to believe their homes are worth more than the recommended agent listing price, down from 79 percent last quarter.

Like other forecasts, HomeGain's report reveals real estate professionals and home owners have a dim view on home prices because of high inventories, continued foreclosures, high unemployment and general economic malaise.

"There has been a lot speculation about the fallout from the robo-signing scandal which led to the temporary halting of foreclosures by many banks throughout the country. That could result in a further backlog of inventory, compounding the supply problem and putting downward pressure on home prices in the first part of 2011," said Nancy Osborne, chief operating officer of Erate.com, a Santa Clara, CA-based financial information publisher and interest rate tracker.

Other findings include:

• Most homes sell for less than the asking price. Fifty-five percent of real estate agents and brokers polled said the difference between the asking and the sold price is less than 5 to 10 percent, 26 percent said less than 11 to 20 percent and 4 percent said less than 21 to 30 percent. The remainder, only 15 percent, said homes sell at or more than list price.

• When asked what percentage of homes for sale are foreclosures, 33 percent said less than 10 percent, 28 percent said 10 to 20 percent and 22 percent said 21 to 30 percent. The remainder, only 17 percent said the percentage of foreclosures ranged from 31 percent to 75 percent or more.

• First-time buyers in high numbers are key to a healthy housing market, but more than half (51 percent) of real estate agents say the percentage of first time buyers ranged from zero to only 10 percent. Only 13 percent of agents and brokers said the percentage of first time buyers numbered more than half their clients.

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