The Washington Post reports that a team of housing economists believe “predictions of further large housing price declines are greatly overblown.”
The Post gathered some of the nation’s top economists to study the housing crisis. They concluded that in reality only four states – Arizona, California, Florida and Nevada – have had home price declines of more than 4 percent in the past year.
The economists said the home price index compiled by the Office of Federal Housing Enterprise Oversight was the most comprehensive of the various indexes.
The Post said, “Our analysis reveals, unsurprisingly, that foreclosures and home prices have negative effects on each other over time, but this does not imply a vicious cycle of collapsing prices. Our models predict that as foreclosures continue to climb in many states, house prices will remain flat or decline in those states — but will not collapse.”
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