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Are Home Prices Really As Low As "Experts" Say?

Home Appraisal
Home Appraisal

I want to throw out an idea, just an idea mind you, so be gentle in your inevitable attacks...

Is it just possible that the nationwide home price depreciation numbers are wildly skewed to the downside due to the fact that the only properties selling right now are either foreclosures, short sales, or people who really really have to move for some important reason?

I ask this because in reading a new study from Zillow.com, I was struck by the following:

In a separate survey of homeowner sentiment, one-third (31 percent) of homeowners said they would be at least somewhat likely to put their homes on the market in the next 12 months if they saw signs of a recovering real estate market.

The Realtors have told us that they guestimate about 50 percent of existing home sales in March were of distressed properties, and they only count what goes through real estate listings, not auctions, so the number could be far higher. So if there is all this pent up demand of not just buyers, but sellers, hanging out on the sidelines, then that tells me that the only regular people (not banks) selling homes now are being forced to sell their homes for financial or location or family reasons; that of course makes them desperate and makes them more amenable to price cuts.

If all this pent up demand of unforced sellers were to decide it's time to get back in the game, these sellers with higher expectations of price and less need to sell quickly, then would prices, in that nasty nationwide game of big overall numbers, actually bump up by a lot? It's just possible.

In any event, I now firmly believe that this housing recovery will be a segregated and segmented one, with some markets bouncing right back in sales and prices, and others languishing for longer.

I did, however, get a call today from a real estate investor who claims the housing crisis in California is over. He says a house listed under $200,000 got 20 (!) offers and wound up selling for over $200,000.

There you go.

Questions? Comments? RealtyCheck@cnbc.com