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Are We Really 2 Years Away From a Bottom?
2 Comments · Posted by admin in Bank Owned, Foreclosure, Home Sales Stats, REO, Short Sales
I read an article recently that discussed the obstacles facing the housing market which suggested we still may be a full 2 years away from a bottom in the housing market.
Here at www.sellmyhouse.comwe know all to well that there is a lot of pain right now in the housing market. Almost 25% of homeowners owe more on their house than it is worth and figuring out how to help these people when the short sale process is so bogged down right now is definitly a challenge. The psycholigical effects of this can be devistating, but that is not what we are discussing in this post.
What are the specific challenges that our economy is facing that might make this true:
- Jobs have not started to return. The real unemployment number is alot closer to 15% than the 9.7% rate offered up by the governments report. It doesn not inlcude folks that have given up on finding a job or those that are working part time because they cant get full time work. We’ve heard runblings from our wall street buddies that this number will approach 20% before it is all said and done. No housing boom in history has every occured without outright job creation, much less a slowing of job losses.
- Foreclosures for the most part have been put off for a year because of TARP and all of the government foreclosure incentives. We have heard that almost 5 million houses are on the verge of foreclosure. If that is true, then that means there is almost 1 full year of inventory waiting on the sidelines.
- Money is very tight. Banks are not lending, and moreover, seem to be looking for reasons not to lend. I read a report that said it isnt that they dont want to lend, it is they just dont have the money to lend right now. Their money is out, and it is out on properties that have lost value. The rest of their money is being horded in case the economy does not get better.
- The government stimulous, which has done a good job of getting potential buyers off the fence to date, is set to end this spring. Will they renew it? Time will tell.
- People are scared of the future. ‘Main street’ America is still struggling mightely with lost hours at work, higher heating bills from this winter, and the economy is on the verge of collapse again.
Those are all very goood reasons why it is possible that we may not see a housing bottom until 2012. Scary thought, especially if you make your living from this industry.
Jason Roberts
Founder & CEO
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Randy Cramer · March 10, 2010 at 9:00 am
Jason,
You’re dead on – unfortunately. It doesn’t take a brain surgeon to understand that until we get this unemployment issue remedied, we’re going to continue to see this problem. I speak with people each week that are trying to secure modifications and can’t because their income has been compromised due to job loss, layoff, whatever. It’s a very complex situation which has caused me to really dig deeper within myself and recognize that my job has become more of an educator to people. I spend a great deal of time teaching people about their options before foreclosure. I have gained a great deal of satisfaction in helping these people through successful short sales. If we all embrace our roles as educators and facilitators, and always keep the interests of our people first, we’ll be able to see this through. I feel very fortunate to be in the position I’m in. I know I’m genuinely able to help people that can’t help themselves.
Mary Ann Varner · March 10, 2010 at 9:40 am
Jason, This is so true. Not only for all the points you mentioned, concerning this scary time, but homeowners are scared……and because of that, they move toward denial. It is gratiifying to help someone either save their home or help them “through a successfull short sale”, they just have to recognize and accept that it is happening to them. Once they are willing to get educated throughout this process, they are in a better position for a short sale rather than a forecosure.