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The signs of stability in home prices are just a fragile bubble not sustainable in long run



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By : Rudson Tren    99 or more times read
The month of May in 2010 registered a small increase in the home prices. It was at a higher level compared to the data for the month of April in the same year. This is looked upon as a lower level stabilization after the Real Estate crisis. Though the hike in prices is not really a significant one, it is still a hike. Compared to April, the prices increased by 1.4%. Compared to May 2009, the hike was far better at 4.6%.

Why is this stabilization recorded? The reason might be the government relief program of homebuyers’ tax credits, which made an $8,000 refund in taxes for those signing a contract for sales, before the first day of May. This was a definite boost for the market as it pulled up the demand a little. Experts and economists hold the opinion that though a small amount of increase was registered, the broader view beyond one single month has a whole different story. Comparing to the level of prices last year, it appears that the housing market is nowhere close to a sustainable recovery.

The highest home prices were registered in the month of July in 2006 and the lowest in month of April 2009. This decline from the highest to the lowest was nearly 32%. The prices are fluctuating, because of the unstable economy and upswings are noticeable only for very short time periods. The tail of recovery took a down turn, before April actually registered modest rebound.

Some data for gain in prices in different states in the month of May are:

  • Las Vegas: Prices declined by 0.5%

  • Minneapolis gained 2.8% and the gain compared to last year was 11.6%

  • San Francisco registered 18.3% hike over last year.

  • San Diego gained 12.4% over last year.

  • Los Angeles came with 9.7% hike this year compared to last year.


These sales figures include the sale of both the new and repossessed properties. The difference is that repossessed properties are sold with 27% discount compared to conventional properties and that’s good news for homebuyers who are looking for distressed properties.
For more information of foreclosure listings, visit foreclosuredatabank.com, your source of fixer upper homes for sale.

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