benjamin_bear

Property Values Set to Fall 43% from Current Depressed Levels

It's true that home owners can choose not to sell and thus reduce dropsin property values. However, this cuts both ways. In LA, affluent home owners have decided to hold on to their homes and thus property values are showing very modest declines in neighborhoods like Santa Monica and Brentwood. But if the only homes being sold are at drastically reduced prices doesn't that bring down the entire area's property values?


On Nov 02 10:34 AM JS Partners wrote:

> Consumers, investors and all other people who are not underwater
> (which remains a segmented question) do not want to realise the loss
> on their home but instead would rather choose to use it for practical
> reasons or seek yield however small.
>
> This could certainly prevent a further 40%+ slide in the residential
> market. And when you see the forced sellers exit the market (like
> now) there should be a degree of stabilisation. The same way that
> the market got exhausted from buying, there will be an exhausted
> seller who would rather sit on a house for 10 years than lose 40%.