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Brace yourself it’s going to be a rocky road for US residential prices.  Paul Dales, US economist at Capital Economics predicts a second dip in US residential prices. His forecast is that over the next 2-3 years, “prices could slide by between 5-10%”.  However, this is considered mild in comparison to the first deadly dip of 30% between 2006-2009.

Unless you have been in hiding, you probably know that the three most likely culprits for the second dip in residential prices are:

1. 10% unemployment and significant “under-employment”.
2. High supply and wilted demand equals lower values.
3. REO inventories expected to continue to rise.

However there are several things that add a silver lining to this storm cloud!

Refinancing: Lower prices and low interest rates equal affordability and purchasing power for qualified buyers. Many well positioned homeowners are refinancing to minimize housing costs.

Way Out is Up: American housing is now undervalued. Therefore there is potential for housing to perform well in the medium term.

People Still Need Homes: Productive REO professionals and Asset Management experts will be in strong demand for the foreseeable future.

Don’t get distracted by the bad news.  People are still buying homes. People still really need REALTORS.  What ‘bright spots’ are you focused on?