Foreclosure Tsunami Could Be Ebbing, Say Experts
April 29th, 2011
Although foreclosures and REO properties continue to force home prices down throughout the country, analysts believe that the tide may finally be turning, albeit slowly, for the beleaguered housing industry[1]. According to the associated press, sales of distressed properties at rock bottom prices in Las Vegas, Miami, Phoenix, Tampa and Detroit – some of the hardest hit metropolitan areas in the country – have thinned the supply of homes enough to “clear the way for higher prices in the long run.” In fact, unsold home inventories in these cities have shrunk by 13 percent over the past year as the deals become too good to pass up, with all five markets at or below 2002 levels[2]. Although economists are maintaining a healthy reserve of caution – many believe that the “shadow market” of backlogged foreclosures and REO properties could “throw the housing market back into turmoil” and doubt that home prices will rebound any time soon – the decrease in inventory is vital to the long-term recovery of value and price in any area.
Celia Chen, a senior director at Moody’s analytics, points to housing supply as a key component in market improvement. “If we were to see several months of supply getting smaller, it would point to an improving housing market,” she said. Chen does not believe that the identity of the buyers is particularly relevant at this stage of the recovery, adding that “even if it is investors [buying the inventory], they are renting them out in hopes that prices in the next several years will rise.”
All the evidence seems to point toward 2011 as the year to “get in on the bottom” of the real estate industry. Do you think that the time has finally come to start buying again?
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[1] http://www.sify.com/finance/bargain-prices-help-reduce-glut-of-foreclosures-news-news-le3i4ldcgga.html
[2] Standard & Poor’s/Case-Schiller Home Price Index
April 29th, 2011 at 2:52 PM
Buying is not a matter of timing, but of prevailing your will over that of the Realtors and Banks that want to keep the inflated prices that existed three to five years ago! I am amazed when I look at REOs and find that neither the Realtor nor the owning bank are willing to come down from the price that the evicted Buyer paid five eyars ago for that home! It wasn’t worth that much then, isn’t even close now!