What are experts predicting for the future of housing, in terms of price and sales volume? The past few weeks have seen an extraordinary number of sharply negative views on the residential markets. Many experts agree that a large volume of pent up foreclosure filings will flood the market with properties in the coming years. “California and other states are likely to see an enormous wave of long-delayed foreclosure action in the coming year as banks deal more aggressively with 3.5 million seriously delinquent mortgages” the LA Times reports. “The real estate market was in “full delay mode” last year on foreclosures as banks worked to correct legal problems with procedures in many states.” But that trend appears to be ending according to the report. “The days of troubled borrowers spending two years in foreclosure limbo are at an end,” Connie Der Torossian, co-president of the Orange County Home Ownership Preservation Cooperative, a nonprofit housing counseling agency, said. ”We’re not seeing people have to wait six or seven months to get an answer,” she said. “It’s more like six or seven weeks.”
Forbes Magazine calls the housing market “dead” even though other segments of the economy appear to be improving. “Housing remains in the gutter, as the latest Case-Shiller Home Price Indices suggest. Prices have barely moved off their crisis lows despite unprecedented support from the Federal Reserve. “
A separate Forbes article is titled “Why You Should Wait to Buy a House.” The article offers a bullet point list of reasons why staying on the sidelines would be prudent, including the following:
- Strategic defaults, foreclosures and short sales all force prices lower
- High levels of underwater mortgages
- A “shadow” inventory of unsold homes held by banks will put pressure on prices when these homes are marketed
Business Insider takes this idea a step further and calls the idea of home ownership itself a “fraud.” The article outlines how all of the intervention to promote mortgages, bail out banks, delay foreclosures, and force modifications have made the housing market dysfunctional and that the solution is to let “home prices drop low enough that investors will want to buy them.”
