U.S. Home Prices Continue To Fall

U.S.resale home prices are now 4.5% lower than they were a year ago, according to Standard & Poor's latest Case-Shiller home price index. Separately, the U.S. Census Bureau reported that U.S. new home sales dropped 1% in June from May to an annualized rate of 312,000 homes. This is the lowest annual rate of sales on record.

Speaking to you as a 35 year Southern California real estate investor, if you intend to sell your home soon, please consult with a local real estate professional but get your home on the market now. Not only are market conditions worsening, but the prime summer selling season will soon be gone. And interest rates are near record lows and could rise, which will take some potential buyers out of the market.

If you are a buyer, the market is coming to you. And once the big banks resolve their shoddy documentation differences with government authorities, in most markets more foreclosures will come. That is in addition to the foreclosures Fannie and Freddie are already trying to sell.

If you are an investor, foreign or American, you can buy collectives of properties at sharp discounts versus their pricing of even 1 year ago. But to be safe, don't heavily leverage them with debt, come in with a hefty down payment and plan to hold for an extended period, for the rental market is good and sales prices will likely continue to drop. Also if you are a foreign investor, with the weak U.S. dollar, in your currency U.S. houses may seem cheap. 20-25 years ago when the yen was super strong, the Japanese made that mistake and vastly overpaid for properties, ultimately losing huge money.

And if you have had your home foreclosed, my heart goes out to you. You not only lost what may have been your dream home but you likely have been mistreated, you're struggling financially, may have lost your job and you've had to uproot your family. Please feel welcome to express yourself here and know there are many others going through some form of what you are and vastly more who may yet face a similar path. Eventually, the housing market and the job market will turn up for they go very much together and times will be better.

Dick
For more information, please see "Home Sales, Prices Reflect Malaise," The Wall Street Journal http://online.wsj.com/article/SB10001424053111903591104576469830286269192.html