2009 U.S. Home Values
Did They Plummet or Stabilize?
Depending on which analysis of which report you read, U.S. home prices either plummeted or stabilized in 2009. Market reports stated that U.S. homes lost $489 billion in market value during the first 11 months of 2009.
Some would read that as “plummeting.” Others would compare the figure to 2008, when homes lost $3.6 trillion in value, and consider the loss a great success—or at least a “stabilization” of the market.
Some markets (Boston, Denver, Providence, RI) even posted gains in home values in 2009. This upward trend appears to be nationwide for the second half of the year. In other words, had the downward trend of the first six months continued, the overall loss would have been much greater. In reality, many areas have seen slight increases in home values since June. This has significantly helped reduce the number of homes that are “underwater,” or where the mortgage balance exceeds the value of the home.
Should home values continue to stabilize—or rise—more homeowners should be able to apply for refinancing. Lower interest rates, more secure mortgage terms, and lower payments could help slow down foreclosures.
Increasing mortgage rates could create a lower demand for home sales. And, studies show that 25% of folks who will move in the next three years are looking to rent or buy.
Is a healthier rental property picture on the horizon for 2010? Nobody knows for sure, but we can all hope that continued stability in home values will lead to less rental inventory, lower vacancy rates, and more stable rents for income property owners.