According to an article in the Dallas Morning News, the foreclosure crisis is still depressing Dallas-Fort Worth home prices, which have decreased 1.2 percent in August from a year ago. Many analysts are considering that an improvement. However, before the foreclosure crisis, Dallas-Fort Worth home prices had reached their peak in June 2007 and have declined by 4 percent since then. Nationwide, homes prices are down 11.3 percent from a year ago, and some cities such as Las Vegas, Phoenix and Detroit are seeing home prices decrease by as much as 30 percent.
Many economists warn that home prices could become further depressed as the foreclosure crisis worsens because of unemployment and the federal tax credit for first-time home buyers expires. We saw what happened to the auto industry which experienced temporary relief from sagging sales with the “Cash For Clunkers” program; but once that program expired many auto industry businesses saw an immediate negative impact on their sales numbers. After the federal tax credit for first-time home buyers expire, we could see more foreclosures caused by homeowners who simply can’t find buyers for their property at a time when both buyers and lenders are moving more cautiously.