No sign of things doing much different in the Phoenix area either. It will be years before things get back to "normal". Short Sales are a growth industry unfortunately.
THREE REASONS WHY AMERICANS CAN EXPECT A DOUBLE DIP IN THE HOUSING MARKET IN 2011 -Looking at the Market in Central Florida will give insight as to what other areas can expect.
Osceola County was one of the fastest growing counties in Central Florida in 2005. By 2007 the boom turned to bust, and builders by the boatload were stuck with excessive inventory in a rapidly declining market.
"Until the balance of supply and demand can be equalized prices can't stabilize" said Sean Snaith, economist with UCF at a recent economic forum held in St. Cloud Florida addressing the local Chamber of Commerce.
Three Reasons Why Americans Can Expect a Double Dip in the Housing Market in 2011 are:
1) Hidden foreclosure Inventory- Lenders are currently holding a five year inventory of foreclosed properties. They have learned that releasing large quantities will further drive prices in housing down- the freeze allowed a blimp to appear on the radar-this was a temporary. The inventory is still there and will eventually come to market.
2) Unemployment- Unemployment and Under-employment postpones home ownership and contributes to the distressed property inventories.
3) The Lack of Pent Up Buyer demand- Buyers are being cautious. The New York Times recently published this article
Lending requirements.- Tighter restrictions* have sidelined many potential home buyers. Lenders were not only controlling the origination of new mortgages they were restricting sales with contingencies on Short Sales and disallowing investors with cash. Resulting in lower sales at lower prices.
*Lenders are grappling with new models to lower FHA score requirements as perspective home owners who wanted to buy were turned down for loans. Recently Wells Fargo announced that they will consider loan applications for applicants with credit scores below 600. They would require 5-10% down payment money, no late payments for 12 months, and a 2 year job history of steady employment.
Federal Programs have filled the gap for some buyers with the utilization of the Neighborhood Stabilization Program and Rural Housing Loans. These have effectively opened the door to home ownership for many buyers who qualified for these Federally funded programs. They typically are buying lower end homes as well, watching carefully their expenses in an economic climate of uncertainty. There is also the Section 502 Guaranteed Single family Loan Program available for homes in Osceola County, Florida.
Allison Stewart Broker, SFR, CDPE