Is There A New Wave of Foreclosures About to Hit the Market?
| Daytona Beach Real Estate Blog. Information and Reports by Lisa Hill, "THE SMART CHOICE!" |
In the course of reading through quite a few real estate blogs this afternoon, I've run across a couple of posts that contained information, or questions that were posed in a way that made me question my current position on how I view the short-term future of the real estate economy. The post below is one of them. This information will really make you think.
This post calls into question the future of our nation's real estate climate, and the report is not good. However, before you proceed with this depressing news, consider on this fabulous Easter Sunday, that God is able to change everything! All we have to do is ask and believe. Of course, we need to educate ourselves, and pay attention to experts in each field. But we should remember this...
2 Chronicles 7:14 If my people, which are called by my name, shall humble themselves, and pray, and seek my face, and turn from their wicked ways; then will I hear from heaven, and will forgive their sin, and will heal their land.
Now keep this promise in mind as you educate yourself, and find balance in your business and your life.
Happy Easter!
www.DaytonaBeachRealEstateSales.com
In an interesting interview on CNBC yesterday between David Faber and Mark (Mr. Mortgage) Hanson of the Field Check Group an observation was made that the current inventory of houses is really not the total picture. Mark calls this the "Shadow Market."
It seems that a lot of the foreclosures from 2008 have not really be released from the bank's inventory yet (the"back end"). More is yet to come. The interview claims that the banks are busy getting these home priced, etc. before letting them into the open market drib by drab in order to maximize their return.
Can you believe it!?!? There is supposedly a ton of houses yet to be sprung upon a public that doesn't seem to be buying in the first place. So, be prepared to see the market inventory jump to new heights (Mark Hanson is predicting close to two years worth of inventory in California, as an example).
Additionally, defaults are continuing to increase -- not in the sub-prime market which, according to Mark Hanson, is under control -- but in the Jumbo and prime mortgage market. This means that people who bought homes over the $417,000 threshold are not making their mortgage payments anymore.
If this is true, there will be continued foreclosures well into 2010 and, possibly, 2011 with huge backlogs of homes available for sale for the long foreseeable future.
Well, that's OK, in and of itself. The question - unanswered - is: what does it take to get people to buy these homes? Certainly price will play a part. Interest rates will play a part. But neither price nor rate has seemed to be able to get buyers off the fence. Or maybe the buyers are ready to buy but just can't get a mortgage because of the strict credit standards now in place.
Now, more than ever, it's important for Sellers to realize that, if they want to sell their home, they must price their home aggressively. Trying to hang onto the last $1,000 or so because it's "needed" is not going to get the house sold. Of course, this really only applies if Sellers have enough equity in their home to be able to price aggressively.
Comments(7)