The tax credit benefit has expired on 30th April and there are apprehensions that without this prop the real estate market prices could take another nose dive with demand falling.

Housing prices across the nation stopped falling during the early months of 2009 and in fact started rising by 0.3% since the previous twelve months that ended last February as per the findings of CoreLogic – a firm that analyses the health of the housing sector. According to its prediction the prices will tumble in the current year prior to spiking once more in the latter months of 2010. Even the prices will most probably be lower by 4.2% in February 2011.

Mark Fleming the Chief Economist of CoreLogic opined that the prices of residential houses “will struggle for maybe another year.”

At the root of the problem is the dwindling number of buyers since the withdrawal of the tax credit benefit. Paul Ashworth of Capital Economics said that this tax credit was one of the prime reasons why prices of residential units have been so upbeat till now. But now the sales will fall. He predicted, “You will see a double dip in housing prices.”

There is another reason for this tumbling of prices. There will be a rush of distressed houses into the market. The inventory hiding in the wings will come onto the centre of the stage tipping the scale with more supply than demand.

According to a survey conducted by National Association of Realtors during the first three months of this year 36% of the sales comprised of houses coming from the distressed category with the units being sold at heavy discounts. The median price of a single-family house was $166,100 – it being approximately the same to what it was one year previously. This is in spite of the gains made in about two thirds of metro areas numbering 152 that came under the scope of the survey.

Apart from NAR, information coming from other agencies like Standard&Poor is indicating this trend in falling prices for five running months till last February. David Blitzer of S & P said that the time had not yet come to say that “the housing market is recovering.”

The good news for some of the sellers is that in those regions that have escaped the full frontal attack of foreclosures the prediction is that prices will rise by 4.9% from this February till the end of 2011 February.

Some pundits opine that although the prices will go down modestly there will not be any dramatic fall.

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