Summary: Moody's forecasting outfit Economy.com issued a report predicting that median existing-home house prices will fall 3.6% next year in the U.S., with some areas falling as much as 20%. Regions most susceptible to sharp house price declines are the southwest coast of Florida, and the metropolitan areas of California, Arizona, Nevada, greater Washington D.C. and Detroit. Specific numbers: Cape Coral, FL to fall 18.6% from peak, Reno, NV 17.2%, Merced, CA 16.1%, Stockton, CA 15.7%, Sarasota, FL 14%, Naples, FL 13.8%, Tucson, AZ 13.4%, Las Vegas, NV 12.9%, Chico, CA 12.6% and Fresno, CA 12.5%; 11 other metros to suffer double-digit declines. Prices are likely to keep falling until 2008 or 2009 in some areas.
Related links: (1) Background: Full article • More detail from Realty Times's write-up • WSJ's coverage of the same story adds context from other recent data • Economy.com's web site (2) Other recent data: Housing and Durable Goods Flip-Flop • Housing Bubble and Real Estate Market Tracker • House Prices Decline Year-Over-Year, More to Come? (3) Commentary: Don't Believe Advocates of a Soft-Landing for Housing • Housing Weakness Good for REITs? • Follow HouseValues' CEO Out of Company Shares • Barron's: Time to Buy Housing Stocks.
Potentially impacted stocks and ETFs: Realtors and Realtor Services Stocks: Realogy (NYSE:H), HouseValues (SOLD) • Lenders: Countrywide Financial Corp. (CFC), H&R Block Inc. (NYSE:HRB) • Furnishings: Ethan Allen Interiors (NYSE:ETH), Home Depot Inc. (NYSE:HD), Sherwin Williams Co. (NYSE:SHW), Mohawk Industries Inc. (NYSE:MHK) • ETFs: streetTRACKS SPDR Homebuilders ETF (NYSEARCA:XHB)
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