In some of the worst housing markets in the country, deflation has reached double-digit proportions. While housing woes have reached around the country, California appears to be poised to rank among the worse. One of the primary reasons for this is the fact that in the last several months California has experienced the largest rate of deflating home prices. In fact, home prices in California have fallen at levels that have been unprecedented.
Miami, Florida is proving to be a very difficult market also. A weak mortgage market and record high foreclosures have led to a fall in home prices as well. Over the past 2 years, Miami has had one of the worst housing markets in the country. The high flying condo boom of just a few years ago has added to the problems of the current massive real estate bust.
While Florida and California may have been easy to predict as being among the first housing markets to crumble when the real estate market crashed, there are other markets that are on the precipice of falling which have not been as easy to predict. One of the primary reasons that Florida and California were poised to fall so rapidly were rapidly escalating home values during the boom a few years ago.
Other markets, however, did not rise as much or as quickly, which could be one reason why they have managed to avoid reaching the top of the list; at least until now. These markets include Nevada, Indiana, Arizona and Massachusetts. Declining home prices as well as high rates of foreclosures in these states are also contributing to their worsening real estate market conditions. In Michigan, where layoffs have been significant, the economy is playing a strong role.
In the coming months, several million adjustable rate mortgages are scheduled to be reset which will only lead to an increase in problems for all markets. In the face of higher payments on their adjustable rate mortgages more and more homeowners will find themselves with the harsh reality of being unable to pay their mortgages. These homeowners will either face a short sell on their homes or an unpleasant foreclosure as refinancing options dry up.
The remainder of 2008 still looks bleak for the housing market according to many indicators. Indicators show it likely for new home prices to drop by 18% and second hand home prices will still continue to fall. There is some indication that the crash could level off in the last quarter of 2008 or the first quarter of 2009, but even then experts agree home prices will not rebound to their previous levels.
There are a few bright spots for select areas. In many markets most of the problem sub-prime mortgages have been eliminated through foreclosures or quick sales, leaving only solid mortgage owners and a more reliable market. Also, the stimulus package is anticipated to help the housing market.
First-time home buyers are going to find relief much sooner than current home owners. Most homeowners are still reticent to sell and lose the paper equity they once had in their homes. Most homeowners aren't facing up to the reality that they can no longer get the same prices for their homes they could command just a few short years ago.
How to stop the foreclosure of your home. You don't need to spend another day worrying about where you're going to live.
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