doctorhousingbubble.com / By Dr. Housing Bubble / January 24, 2013
The big story of 2012 was the incredible decline in available housing inventory for sale. This trend appears to be continuing and is adding a tremendous amount of pressure on the current market especially for those looking to buy. Ironically, the increase of real estate values will also revive many home owners from their zombie slumber in negative equity. Over 1.4 million borrowers came out of a negative equity position in 2012. This is a large number given the limited amount of inventory on the market. How many of these people will be looking to sell as their homes turn into positive territory? The quest for inventory might come from a very familiar place with regular people selling their homes for a variety of reasons including moving to another place, cashing in, marriage, divorce, new job, or any other factors that cause people to sell. In other words, a more normal housing market. Will these former negative equity borrowers push inventory levels up?
The underwater nation
Even with 1.4 million borrowers exiting out of negative equity, we still have 10.7 million American underwater. In many cases, some are severely underwater:
Nearly
10 percent of borrowers are still in deep trouble with loan-to-value
ratios above 125 percent. 22 percent of properties with a mortgage are
still underwater and this is a sizable amount. The drastic drop in
inventory is uncharacteristic but does make sense. Banks are controlling the
flow of distressed properties onto the market. We currently have over 5
million homes in some sort of distress (foreclosure or with at least
one missed payment). This has been going on since the housing bubble
popped. The total completed foreclosure count is somewhere around 5
million.
READ MORE
The big story of 2012 was the incredible decline in available housing inventory for sale. This trend appears to be continuing and is adding a tremendous amount of pressure on the current market especially for those looking to buy. Ironically, the increase of real estate values will also revive many home owners from their zombie slumber in negative equity. Over 1.4 million borrowers came out of a negative equity position in 2012. This is a large number given the limited amount of inventory on the market. How many of these people will be looking to sell as their homes turn into positive territory? The quest for inventory might come from a very familiar place with regular people selling their homes for a variety of reasons including moving to another place, cashing in, marriage, divorce, new job, or any other factors that cause people to sell. In other words, a more normal housing market. Will these former negative equity borrowers push inventory levels up?
The underwater nation
Even with 1.4 million borrowers exiting out of negative equity, we still have 10.7 million American underwater. In many cases, some are severely underwater:
READ MORE
Please bookmark us
No comments:
Post a Comment