Foreclosure snapshot
December 4th, 2009 Categories: National Real Estate Trends, Pre Foreclosures, Real Estate News
- More than 1.5 million homes have been lost to foreclosure, according to the Center for Responsible Lending.
- Goldman Sachs is projecting 13 million foreclosures of all types during the next five years.
- One in 10 homeowners are late with mortgage payments, according to the Mortgage Bankers Association.
- Owners owe more than the home is worth in nearly one in five homes, according to First American Core Logic.
More Scary Headllines:
• Banks braced for record debt defaults in the New Year
• Friday’s Jobs Report Will Set December Treasurys Tone
• Treasury to meet with mortgage servicers Monday
• Dubai Debt Woes Deliver Commodities Wake-Up Call
Around the world people are wondering where to park their hard earned cash during the coming year. So, what does the new year have in store for short sale investors? It depends who you ask…
According to the National Association of Realtors, prices are expected to rise 4 percent while home sales will rise by 700,000 to 5.7 million. Foreclosures will top out in the first six months of 2010 and the “fear factor” will fade to create a sunnier outlook for real estate by the end of the year.
On the other hand, less than optimistic projects are expected globally as the shock waves of recent Dubai debt hits the market creating a mini-panic among financials and bankers around the world. Loans to non financial business owners continue to decline and debt deflation combined with credit contraction continues well beyond 2010 according to the popular website “Seeking Alpha”.
Fox News reports commercial real estate is expected to continue to decline until later in 2010 at which point there is hope for optimism as the economy improves. Of course, should unemployment continue to rise that could be stalled for some time however, commercial property values are beginning to steady in many areas of the nation.
REIT’s are expecting a promising year and a record number of trusts are seeing large gains. In fact, they are considered downright affordable in some cases while a rash of new REIT’s have recently hit the market as desperate stockholders seek investments backed by tangible assets.
Interest rates will remain low according to the majority of experts; the general consensus reflects the risk of rising interest rates to negatively impact real estate before a full recovery can get underway. With so much capital sitting on the sidelines, there is little incentive to raise rates prematurely.
Inflation will remain low throughout 2010 and perhaps through 2012 however, tightening credit will make it increasingly difficult to finance properties despite low rates and bargain prices.
Additionally, investors expect the Fed to stop purchasing mortgage bonds creating additional stressors on the market. Finally, new housing starts are expected to rise but continue to lag behind former highs for several years to come.
Courtesy Chris McLaughlin
