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Triple Dip in Housing on the Way


I guess it doesn’t really come as a surprise.

For those who watched the housing market surge and quickly unravel over the past decade, a multi-dip housing market was obvious.

After home prices surged to their apex in mid-2006, they stumbled badly until hitting their first official post-bubble bottom in 2009.

Home prices were off 31 percent from the highs of the boom and there was no evidence of a turnaround in sight.

Then came the homebuyer tax credit, which increased sales and propped up home prices, at least in the interim.

Of course, that rally was short-lived, as broader economic concerns made a quick recovery impossible, especially with all the excess housing stock (shadow inventory) and the full extent of the foreclosure crisis still unfolding.

And so last winter, home prices stumbled again, dipping a second time to 33 percent below peak prices.

Then came another rally earlier this year, when robosigning allegations put the brakes on many foreclosures nationwide and new record low mortgage rates brought along a new sense of optimism.

However, it was just a matter of time before the foreclosure train started chugging again, and the excitement of low mortgage rates waned.

Heck, even the low mortgage rates couldn’t hand purchase-money mortgages the majority share of mortgage applications.

It was only mortgage refinancing that seemed to be the real positive from that.

Triple Dip Here We Come!

Now we’re entering the traditionally slow home buying season. Fall and winter. When it gets cold and people pump the brakes on home buying and selling.

And financial analytics company Fiserv sees homes prices falling by another 3.5 percent by next June, to an overall new low of 35 percent versus the 2006 peak.

Hello triple-dip.  We’ve been expecting you…

There it is. At a time when it now appears as if the Fed has used all the weapons in its arsenal, including the latest underwater refinance program, which isn’t expected to change the world.

So the next logical question is, “Will there be a quadruple dip?”

Well, Fiserv projects home prices to rise in mid-2012, but doesn’t expect a significant recovery.

They’re currently projecting prices to climb 2.4 percent between June 2012 and June 2013.

In other words, even if the dipping ceases, don’t expect to get rich overnight in housing. It’s gonna take some time.

Additionally, there are still a ton of issues that make home price appreciation difficult, namely high unemployment levels.

Put simply, if people don’t have money to buy homes, they won’t sell at their still-inflated prices.

And even many of those who are employed lack the confidence to buy because they just don’t know how secure their jobs really are.

[6 Things Holding Renters Back From Becoming Homeowners]

Of course, to accurately gauge the housing recovery, you need to go local. In 31 of the 385 metros tracked by Fiserv, home prices are expected to achieve double-digit gains.

And another 71 markets are expected to realize gains of five percent or more.

The top gainer is expected to be Ocala, Florida, with an anticipated 22.4 percent gain for the 12 months ending June 30, 2013.

Meanwhile, Miami is expected to see home prices fall another 13.5 percent by next June, and another 5.2 percent the following year.

Read more: Should you buy a house now or wait?

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