This morning I opened my mail and found an update from Fannie Mae talking about how much better the economy and real estate markets will be in 2012. But they temper this with references to the shadow inventory of homes and number of foreclosures yet to be done.
WASHINGTON, DC — Thanks to strengthening in consumer spending and growing policy clarity at the end of 2010, the economy is finally poised to accelerate and sustain above-par, less volatile growth, according to the January 2011 Economic Outlook released today by Fannie Mae's (FNMA/OTC) Economics & Mortgage Market Analysis Group. The economy is expected to grow by 3.6 percent in 2011, compared to an estimated 2.8 percent in 2010. The group expects some increase in housing activity during 2011, however, a growth-oriented view of housing is not expected until 2012.
"The economy has regained momentum entering 2011 and we see significant improvement in the economy's ability to grow compared to 2010," said Fannie Mae Chief Economist Doug Duncan. "We expect a small rise in home sales this year, but significant amounts of supply and shadow inventory of expected foreclosures will continue to hamper a robust housing picture for some time."
What do you think? Is the housing market regaining some strength? I know here in the greater Seattle area there is some optimism and some builders are back in action. DR Horton and a handfull of players are working to complete homes for 2011 sales which seems crazy to me considering the existing inventory. But, they probably picked up the land at a substantial discount making it possible to build, sell and still make a profit.
How is your market? Do you think Fannie Mae's prediction of a marginally brighter future are going to come to pass or are the dark clouds of foreclosures and failed loan modifications going to hang heavy on home buyers again this year?