A double dip occurs when home price growth slides back below previous lows after a period of growth.
Clear Capital, a provider of data and solutions for real estate asset valuation, investment and risk assessment, has some comments on the real estate market.
"We continue to see softening of home price gains, due in large part to the buyer pullback after the expiration of the tax credit," said Dr. Alex Villacorta, Senior Statistician, Clear Capital. "Overall, prices look poised to continue their deceleration with a likely drop into negative territory by the end of the year. But keep in mind, the price gains we experienced over the past two years are providing a cushion against prices going into double dip territory, meaning it is unlikely we'll see prices below their 2009 lows this year."
"As we head into the final months of the year it will be interesting to see how markets respond to an environment without any buyer incentives," added Dr. Villacorta. "We are observing local markets that are within a few miles of each other diverging in their response to the current housing climate—some are showing strong stable growth and others have yet to reach a price bottom. All of this points to the fact that recovery in the housing market will occur segment by segment in micro markets around the country."
"While local micro markets may face an eventual double dip, it’s important to note that both quarterly and yearly prices at the national and regional levels are still up, and price gains of the last year-and-a-half have created a buffer that will slow the development of a national double dip scenario. So, for a national double-dip to occur, prices would need to drop below their 2009 lows. This would be a complete direction change and decline of 11.7 percent from current levels. Barring a meltdown reminiscent of late 2008, we think it unlikely prices would reach new record lows anytime before spring 2011."