In order to be attactive, housing prices should fall another 24%

January 25, 2011 at 1:43 pm Leave a comment

A report issued by the Observatorio de Coyuntura Económica del Instituto Juan de Mariana states that prices should fall an additional 24% in order to eliminate any chance of another bubble.

In 2007, the same report stated that housing prices were overvalued by at least 40% and in 2009 this estimation dropped to 32,5%. These were signs that things were going in the right direction. In 2010, this value dropped to 20%. Waters settled last year but it seems that last year’s estimation is superior to last year’s estimation.

The reduction in percentages suggests that the recovery of the real estate market is still delayed. According to this study, three more years would be necessary in order to reach an equilibrium on the market.

The report concludes that the correct estimation of housing prices will help reboot the economy.

 

 

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Entry filed under: News, Real estate. Tags: , , , , , .

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