“The days of plunging housing prices, you know 20, 30 percent, are very, very far in the rear-view mirror, we’re not going to see that again. There simply has not been enough new construction put in place to constitute such a scenario.”
– Eric Landry, a housing analyst with Morningstar, speaking to WBEZ about 2011 home prices. Clear Capital has forecast a 5.8% drop in Chicago home values this year, according to the report.
nonsense…
With the significant ‘shadow inventory’, both foreclosures that are holding banks on listing, and even much, much bigger, the people that would like to move, or will NEED to move soon and that are ‘waiting’ on prices to recover (yeah, keep waiting…), there will be a lot of downward pressure still to come.
Anecdotally, just one example, in my condo building in the Loop, both couples on each side of my condo unit both have children, one in a 2-bedroom with a 6 month old, the other in a 1-bedroom with a 1 1/2 year old. You think these people are going to want to keep living in thier Loop condos for much longer??
nwzimmer,
It’s a long stretch to call “nonsense” on this.
It isn’t easy to fathom what the shadow inventory means for demand, since there are also many “shadow households” pending formation.
You can gain some sense of the complexity of this issue in this recent study (pdf) from Harvard’s Joint Center for Housing Studies.
thanks for the link, just briefly scrolled through it, looks like an interesting read; might take an hour this weekend to read through it…