Wednesday, October 12, 2011
Unemployment up, inflation up, house prices down
Weak economic growth and falling employment will cause house prices to fall 10% by 2013, according to Capital Economics. In a Q4 housing market report, Capital Economics predicts that house prices will decline by 5% in both 2012 and 2013. And it says that the threat of another major financial crisis and a return to recession mean that risks to its forecasts are to the downside....It says: â€œAgainst this backdrop, house prices have further to fall. While traditional valuation metrics are not a perfect guide to the scale and timing of future price movements, they suggest that housing is overvalued by up to 20% relative to historical norms.