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Could it be as simple as the old principle of Supply & Demand? - The road to recovery in our real estate market.

The last week or so I have been reading that many large banks
and mortgage lenders are now instituting policies to help curtail These signs may have to be thrown away!
the rise in foreclosures. (I'll refrain from stating that it took them
long enough to think and act clearly..)

JP Morgan - Chase Bank has announced they will modify the terms
of some mortgages (estimated up to 400,000 - that's not some but
many!) for those homeowners who are struggling to keep up with
the terms of their contracts.

Countrywide recently announced a mandatory loan modification program.
Mandatory. That's good news for those homeowners who have been unable to reach anyone at Countrywide (now currently owned by Bank of America) in their pleas for help to avoid losing their homes to foreclosure.

I'm not a rocket scientist. Nor do I have a degree in economics.

I do know one thing : If existing home loans for people are modified and they are able to stay in their homes we should be seeing fewer bank owned homes entering our real estate markets.

Here's the good news: Home sellers will have fewer homes on the market competing with their homes.
When that happens the downward spiral of sales prices will start to reverse itself.

The bad news? The buyers who are waiting for the bottom of the market to purchase may have waited too long.

I don't believe I live in a fairy tale world. Supply and demand has always been something I understand, and it looks like we're going to start seeing the signs of that basic principle working again very soon.

© Kris Wales a Macomb County MI real estate agent

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Posted by Kris Wales - Macomb County MI real estate blog & homes for sale search site on 11/04/2008 08:13 AM

Comments (19)

macomb county mi foreclosures, bank owned homes, michigan home sales

This post has been included in Michigan Information Macomb County, MI Information

19 Comments on Could it be as simple as the old principle of Supply & Demand? - The road to recovery in our real estate market.

NOV

2008

In our area (Dallas, TX), we may have indeed reached the bottom but the word isn't out yet. Less homes on the market but much fewer buyers. Wish we had a crystal ball and could get the word out. Less supply and hopefully future demand will equate to stronger home prices...a time we will all enjoy again!

Kris,

Very good post. Would you please post this to "Celebrating Free Enterprise" also? It would be a nice addition to our group. Thanks. :)

Steve

Finally some good news! We certainly seeing a small shift in supply in my market since new home starts are almost non existent. Hopefully we will work through the surplus soon.

I hope this helps some people for the people it doesnt help I wish they would do away with the short sale prospect and go through the foreclosure process faster and spit it out as a bank owned so I can move these properties faster and reduce our inventory. I think that would also help

Kris - Isn't it amazing the basic principle of Econ 101 was forgotten by all those MBAs in the banking industry?

Hopefully this bodes well for demand. Basic economics...bring it on!

Kris, I like the way you think. I can't poke any holes in your logic.

Kris, I believe people here are still waiting for the bottom, also not believing we have hit it. I like your logic and I'm glad to hear some positive news.

Hi Kris,

It's pretty frustrating isn't it?! I have buyers who are witing for interest rates to "get better" if you can believe that!

Kris, we had an awesome speaker at KW this AM. He is working with many banks and if we have a short sale he can help us get the house Certified for a Short Sale with a bank. They run the numbers through a system and get us an approval between 24-42 hours. Then we can decide is we should even touch this listing. I was really excited about it. Our broker/owner is working with them in CA and is bringing it into the MI market.

I'll post on it after I understand it more.

Hi Kris,
Let's hope we have bottomed out -- predicting where it is and when it will come is a gamble. Those who continue to wait will be the losers.

I love it - we have hit bottom - no where to go but UP - you rock I agree

NOV

2008

Connie:   I think it would take a few months before "there they are!" signs of a recovery are around us. I do believe we'll see less homes coming on the market also, but now the buyers have to start ignoring the "No one can get a mortgage" media dribble. Thanks Connie.

Steve:   Thank you for your kind comment. Feel free to reblog it there to your group. I only joined a couple and end up forgetting about them :-)

Beth:   That's another area that we're seeing that is helping: Much fewer new home construction. In fact, I'd be hard pressed to think of one new development in my area. Ok, I can think of 2. That will also help level out supply and demand.

Heather:   I don't know that it makes any difference on a persons credit report when it is showing short sale vs. foreclosure, but I do know it makes sellers feel better about their circumstances. If they want to try to sell short and go through the process God bless them.

Norma:   It is amazing. I would have thought it would have been ingrained in their heads just like "Location, location, location" is in ours.

Gary:   I feel the same way :-) Basic economics I understand. The ever fuzzy new math throws me for a loop!

Greg:   Thanks. Not too shabby for someone without an ecomics degree huh? (You had me smiling with your comment)

Carole:   I think by the time people (buyers) see the bottom they'll be looking down at it wishing they had purchased a couple of months previously.

Greg:   I believe people think interest rates nudged back up again because of the bailouts or some such thing. What they don't understand is that when interest rates lower, the price of housing will go up. At least that is what I see in my area.

Missy: I look forward to read your post about that. Should be interesting and helpful to those of us in Michigan. The more inventory that can be moved off the more the closer to stabilization we'll be. Thanks!

Cynthia: Once again I am going to ask Santa for a crystal ball. This year I hope I am gifted with it :-) Until then, we'll all have to watch for subtle signs as we'll notice it before the media does.

Thesa: I do believe we'll see some nice changes over the next 6 months. I'm anxious for it to happen.

I think you are right, Kris darling! I'm hopeful anyway. But like you, I'm wondering what took them so long.

BTW...thank you so much for your love and prayers for my daughter. You are so special! GBU!

NOV

2008

For many people, the word "simple" is is a four-letter word, and I'm not talking about LOVE, FREE, or HELP. LOL

NOV

2008

Elizabeth: I'm really excited and anxious to see what the next couple of months holds for us. Stablilization? I hope so! (Hope she is feeling better today both physically and spiritually!)

Russel: LOL! What a great way of putting it Russel.

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