By: Ellen Chang
The price of houses in the United States will drop even more, says Barry Ritholtz, founder of Fusion IQ, the investment research firm.
Current prices are still way too high because the decline didn’t reach the “fair value” level compared to rent and income levels, he told Yahoo Finance TechTicker.
During the next 12 months, the price of houses will fall by another 10 percent, Ritholtz said.
The amount of houses compared to the number of buyers is still skewed even if houses are now more “affordable,” he said.
The housing bubble has caused an $8 trillion negative wealth effect, said Howard Davidowitz of Davidowitz & Associates.
“I mean this is a complete disaster and that’s why we are going to have a double dip. We’re guaranteed a double dip in housing,” he said.
Potential home buyers don’t need to fear the market will be “running away” from them, said Dan Alpert, managing director of Westwood Capital.
“The affordability is pretty much here to stay. I think we’re going to be in an era of very flat pricing and very, very cheap money for a very long time,” he said.
Home prices will fall at least another 5 percent to 8 percent, Alpert predict