U.S. home prices have dropped an average of 18 percent since July 2006, said Brian Louis in Bloomberg.com. Many experts warn that prices will continue to fall until the market can absorb the huge number of houses already for sale. The supply of unsold properties—11 months for existing homes—is at its highest level since the National Association of Realtors started tracking such data, in 1982. A wave of foreclosures could put even more houses on the market in the coming year. “It’s going to take several years to get rid of all this inventory,” said Eli Broad, co-founder of national builder KB Home.
But real estate is a local game, said Amanda Gengler in Money. “Your region could be in far better shape than the country as a whole.” In fact, prices in a third of all metro areas are now actually higher than where they were a year ago. Don’t try to time the market, but do get a sense of its relative health. Inventory is a key factor, says David Stiff of Fiserv Lending Solutions. A stable local housing market has about a six-month supply of houses for sale, which means houses should sell in about 90 days. A slowdown in monthly price declines is also good news: Look for at least three months of smaller price drops.
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