Moody’s Analytics Forecasts Continued Decline in Housing Prices Through Mid-2011

NEW YORK--()--House prices will continue to decline through the middle of 2011, but the severity of the decline will vary according to location, says Moody’s Analytics in a newly-available forecast.

The forecast is based on Moody’s Analytics RealtyTrac Foreclosure Data, which draws on extensive foreclosure, property, loan and home sales data, as well as the Case-Shiller® Home Price Index Forecasts.

The data shows that housing price declines will be highest in areas with the largest inventories of REO (real-estate owned) properties, including Las Vegas, Fort Lauderdale, and Riverside, CA. Other areas such as Austin, TX and Albany, NY will see less severe declines given low levels of REO inventories in these markets. House prices have been more stable in these areas than the national average.

“The housing market is having a tough time shaking off its malaise, and a true recovery in another six to 12 months away,” Celia Chen, Senior Director at Moody’s Analytics. “The weak economic expansion, combined with the weight placed upon housing by a large inventory of distressed homes will send house prices back down until the second half of next year. In particular, the growing inventory of homes in REO portends another flood of discounted distress sales that will drag down house prices.”

Moody’s Analytics, a leading independent provider of economic forecasting and credit risk services, expects that REO inventories, as measured by RealtyTrac, will peak early next year at 971,000 REO properties, a year-over-year increase of 16%.

The forecasts for foreclosure inventories and foreclosure activity at the metro area level, combined with the Case-Shiller Home Price Index Forecasts, are designed to provide banks, asset managers, federal and local government users with analytical insight for the U.S. housing market in all U.S. metro areas. Foreclosure data and associated forecasts are updated monthly.

For further information about Moody’s Analytics RealtyTrac Foreclosure data and forecasts, visit www.economy.com/realtytrac

About Moody’s Analytics

Moody’s Analytics helps capital markets and credit risk management professionals worldwide respond to an evolving marketplace with confidence. The company offers unique tools and best practices for measuring and managing risk through expertise and experience in credit analysis, economic research and financial risk management. By providing leading-edge software, advisory services and research, including the proprietary analysis of Moody’s Investors Service, Moody’s Analytics integrates and customizes its offerings to address specific business challenges. Moody's Analytics is a subsidiary of Moody's Corporation (NYSE: MCO), which reported revenue of $1.8 billion in 2009, employs approximately 4,300 people worldwide and maintains a presence in 26 countries. Additional information about the company is available at www.moodys.com.

Contacts

Michael Adler, 212-553-4667
Vice President
Corporate Communications
michael.adler@moodys.com

Release Summary

Moody’s Analytics today announced that it forecasts house prices to continue to decline through the middle of 2011, but that the severity of the decline will vary depending on location.

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Contacts

Michael Adler, 212-553-4667
Vice President
Corporate Communications
michael.adler@moodys.com