Home prices: What if we're nowhere near the market bottom and prices drop a lot more?
Wake up and good morning. We Floridians and, of course, the Sunshine State real estate industry have been hoping month after month that housing prices here are near or at the bottom, and should start modestly moving up in the next several years. (Photo: Joe Raedle/Getty.)
What if we're wrong? What if they could drop by half, again?
There's new discussion out there that housing prices could fall more -- a lot more -- which could send the Florida economy off a cliff. First up is Barry Ritholtz, CEO of money manager Fusion IQ, who in the latest Bloomberg BusinessWeek magazine says U.S. homes in the U.S. remain overpriced based on two key measures—their relationships to incomes and rents. They may have a lot further to fall, says Ritholtz. Read more here.
Then there is Richard Suttmeier (photo, right) of ValuEngine.com who says the housing numbers have gotten much worse than expected. In a blog on Forbes, the chief market strategist says home prices could drop 50 percent more. Says Suttmeier, who uses the S&P/Case-Shiller index as his guide: "If it gets back, like stocks, back to the 1999-2000 levels, that’s another 50% down in home prices." Watch this video interview of his thoughts.
Anybody think we're fooling ourselves about hitting bottom on Florida home prices? Are we about to drop a lot more? Or have Florida prices dropped faster than elsewhere in the country and we've already taken our hit?
-- Robert Trigaux, Times Business Columnist