{"id":968,"date":"2010-08-10T14:24:52","date_gmt":"2010-08-10T14:24:52","guid":{"rendered":"http:\/\/www.nyonlinerealty.com\/blog\/?p=968"},"modified":"2010-08-10T14:28:55","modified_gmt":"2010-08-10T14:28:55","slug":"double-dip-recession-threatens-to-shave-20-off-home-prices-moodys","status":"publish","type":"post","link":"https:\/\/blog.nyonlinerealty.com\/?p=968","title":{"rendered":"Double-Dip Recession Threatens to Shave 20% off Home Prices: Moody’s"},"content":{"rendered":"
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By: Carrie Bay<\/p>\n

Could the U.S. economy slip back into the throes of the recession that nearly crippled the nation\u2019s financial system and protracted any semblance of a housing recovery? The analysts at Moody\u2019s Investors Service<\/a> think so.<\/p>\n

\u201cThe risk of a double-dip recession is rising. We believe the odds of a near-term double dip recession have increased from nearly one in five this spring to closer to one in four,\u201d they wrote in a research report released Monday.<\/p>\n

And they warn that if the economy sinks back into recession, housing activity will follow. If such a scenario were to play out, Moody\u2019s says home prices are likely to fall by another 20 percent before they stabilize in early 2012 \u2013 a full year later than the company\u2019s baseline outlook of a 5 percent drop before leveling off in early 2011.<\/p>\n<\/div>\n

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Moody\u2019s says the economic recovery is losing momentum with retail, housing, manufacturing, and most importantly the job market having weakened in recent weeks. Real GDP, which grew 5 percent annualized during the fourth quarter of 2009, has slowed to half that pace in the second quarter of this year, the ratings firm explained.<\/p>\n

\u201cThis rate is below the economy\u2019s potential, and we expect unemployment to drift back up into the double digits,\u201d Moody\u2019s said in its report.<\/p>\n

All this contraction bodes badly for housing markets, where oversupply and muted demand have home prices fettered, and weak economic conditions, especially rising unemployment, are making it harder and harder for borrowers to keep up with their mortgage payments.<\/p>\n

Moody\u2019s says foreclosures pose a major downside risk, with another vicious spiral of defaults and property repossessions a possibility.<\/p>\n

The company\u2019s analysts say the success of the Home Affordable Modification Program (HAMP) is vital to squashing this possibility, but it has been progressing slowly and a number of borrowers are simply too deeply troubled to benefit from a loan modification.<\/p>\n

If the recent revisions to HAMP<\/a> \u2013 including principal-reducing modifications and forbearance for unemployed homeowners \u2013 do not produce more substantial results, Moody\u2019s says foreclosures will exceed already-elevated projections, leading to an even sharper drop in home prices.<\/p>\n

http:\/\/www.dsnews.com\/articles\/double-dip-recession-threatens-to-cut-another-20-off-home-prices-moodys-2010-08-09<\/a><\/p>\n<\/div>\n","protected":false},"excerpt":{"rendered":"

By: Carrie Bay Could the U.S. economy slip back into the throes of the recession that nearly crippled the nation\u2019s financial system and protracted any semblance of a housing recovery? The analysts at Moody\u2019s Investors Service think so. \u201cThe risk of a double-dip recession is rising. We believe the odds of a near-term double dip […]<\/p>\n","protected":false},"author":1,"featured_media":0,"comment_status":"open","ping_status":"closed","sticky":false,"template":"","format":"standard","meta":{"footnotes":""},"categories":[79],"tags":[245],"class_list":["post-968","post","type-post","status-publish","format-standard","hentry","category-articles","tag-double-dip-recession"],"aioseo_notices":[],"_links":{"self":[{"href":"https:\/\/blog.nyonlinerealty.com\/index.php?rest_route=\/wp\/v2\/posts\/968"}],"collection":[{"href":"https:\/\/blog.nyonlinerealty.com\/index.php?rest_route=\/wp\/v2\/posts"}],"about":[{"href":"https:\/\/blog.nyonlinerealty.com\/index.php?rest_route=\/wp\/v2\/types\/post"}],"author":[{"embeddable":true,"href":"https:\/\/blog.nyonlinerealty.com\/index.php?rest_route=\/wp\/v2\/users\/1"}],"replies":[{"embeddable":true,"href":"https:\/\/blog.nyonlinerealty.com\/index.php?rest_route=%2Fwp%2Fv2%2Fcomments&post=968"}],"version-history":[{"count":4,"href":"https:\/\/blog.nyonlinerealty.com\/index.php?rest_route=\/wp\/v2\/posts\/968\/revisions"}],"predecessor-version":[{"id":972,"href":"https:\/\/blog.nyonlinerealty.com\/index.php?rest_route=\/wp\/v2\/posts\/968\/revisions\/972"}],"wp:attachment":[{"href":"https:\/\/blog.nyonlinerealty.com\/index.php?rest_route=%2Fwp%2Fv2%2Fmedia&parent=968"}],"wp:term":[{"taxonomy":"category","embeddable":true,"href":"https:\/\/blog.nyonlinerealty.com\/index.php?rest_route=%2Fwp%2Fv2%2Fcategories&post=968"},{"taxonomy":"post_tag","embeddable":true,"href":"https:\/\/blog.nyonlinerealty.com\/index.php?rest_route=%2Fwp%2Fv2%2Ftags&post=968"}],"curies":[{"name":"wp","href":"https:\/\/api.w.org\/{rel}","templated":true}]}}