Case: Foreclosures Will Help Market Recover
- May 29, 2008
Wellesley, Mass.– Karl Case–co-founder of the S&P/Case-Shiller home price index and an economics professor at Wellesley College in Wellesley, Mass.–said this week that foreclosed property auctions will speed up the housing market’s revival by shrinking the housing supply.”I think we’re going to see some signs of life in the next few months,” Case told Bloomberg. “The market is beginning to clear somewhat. There is some good news in this.”The S&P/Case-Shiller home price index, released Tuesday, found that home prices in 20 U.S. metropolitan areas dropped 14.4 percent in March compared to 2007 levels–the biggest fall on record.The rapidly declining home prices indicate auctions are increasing, Case said.”Banks don’t wait around,” he said. “They put it on the market and get rid of it. That means prices adjust more quickly,” and it “clears the inventory out faster.”In some regions, such as San Francisco, sinking prices already may be helping the housing market recover. In April, the median home price in San Francisco was 22 percent lower than the June and July 2007 high point. Sales leapt 29 percent in April from the month before–the largest gain for that period in 20 years, DataQuick said.