London, United Kingdom (PressExposure) April 23, 2010 -- With only the US government's extended $8,000 tax credit incentive for first-time homebuyers set to expire in June, "Zen International" analysts believe that the final prop for the stagnant housing market will disappear taking with it the last obstacle to further house price falls.
Once considered the foundation stone underpinning the American consumer, the real estate market has been in steady and, at times, alarming decline over the last three and a half years since the onset of the subprime debacle and "Zen International" believes that prolonged high unemployment, a record level of foreclosures and seizures and, consequently, an increasing number of properties being added to already large unsold inventories means the only way is down.
Analysts at the firm believe that the US Federal Reserve should be concerned given the trillions of dollars' worth of toxic assets it took off bank balance sheets in return for US Treasuries not to mention the prospect of some of the generally good quality mortgages it bought from nationalized mortgage finance firms, Fannie Mae and Freddie Mac, during its quantitative easing program going delinquent if borrowers decide to simply walk away from their obligations rather than service a loan on a depreciating asset.
"Zen International" analysts believe that prices could have another 10 per cent to fall before stagnating for an extended period.