From all the signs I see, those who wish to sell their homes in most parts of the country can expect their situation to worsen in the next few years.
That might be good news for buyers, but unfortunately, at least for now, lending standards are so strict that unless you have lots of cash you can’t buy.
While a few months ago many were predicting that the housing market was leveling off across the country, it appears now that the worst is yet to come.
That would be terrible news for the unemployed as moving for a job will be more difficult if one can’t sell their home.
The problem will magnify as more and more homeowners, who owe more than their homes are worth and see no improvement, will simply hand the keys back to the banks.
The latest article I read on the topic came from the New York Times May 22 by reporter Eric Dash.
Here are a couple of paragraphs that give you an idea of the magnitude of the problem:
The nation’s biggest banks and mortgage lenders have steadily amassed real estate empires, acquiring a glut of foreclosed homes that threatens to deepen the housing slump and create a further drag on the economic recovery.
All told, they own more than 872,000 homes as a result of the groundswell in foreclosures, almost twice as many as when the financial crisis began in 2007, according to RealtyTrac, a real estate data provider. In addition, they are in the process of foreclosing on an additional one million homes and are poised to take possession of several million more in the years ahead.
Five years after the housing market started teetering, economists now worry that the rise in lender-owned homes could create another vicious circle, in which the growing inventory of distressed property further depresses home values and leads to even more distressed sales. With the spring home-selling season under way, real estate prices have been declining across the country in recent months.
“It remains a heavy weight on the banking system,” said Mark Zandi, the chief economist of Moody’s Analytics. “Housing prices are falling, and they are going to fall some more.”
To read the complete article, click here.
- West Hartford And Other Places Seeing A Return To Bidding Wars, Multiple Offers As Housing Market Bottoms Out
- Half of Homeowners Under 40 Are Still Underwater
- Greenwich Mansions Can’t Find Buyers
- Housing Prices May Have Bottomed Out
- Homebuyers Coming From Foreign Countries Snapping Up Hot Properties
- Foreclosure Crisis Could Temporarily Boost Home Prices, But Long-term Hurt Housing