BluefoxToday blog : Is The Housing Market Improving?

Is The Housing Market Improving?

Is the housing market improving? According to Elizabeth Warren, chair of The Congressional Oversight Panel, it’s not. While the market has shown signs of improvement in some areas, the overall picture is still quite grim. According to Warren, as many as 10 to 12 million homes could be lost to foreclosure, the consequences of which could be “disastrous.”

 

home underwater

Continued foreclosures will cause a ripple effect throughout the economy, as homes in those areas hardest hit see values slide even further. In a recent report, Warren described the government’s foreclosure modification efforts as “inadequate,” but it appears that nothing will be done to improve a system hell-bent on propping up bank profits on mounds of foreclosure victims.

 

While I like the spunk with which Warren attacks what she perceives as flaws in the program, it appears her words are just that, impotent criticisms without the power to effect change, falling on the unprincipled ears of politicians more interested in saving their political skins than creating beneficial change.

 

The Congressional Oversight Panel or COP was established to oversee the original TARP program which ultimately abandoned the purchase of “troubled assets” and became a simple bailout of big banks. And the not so aptly named COP board seems as effective as a policeman with a booming voice, but no gun.

 

I suspect that Warren is correct about the potential for additional waves of foreclosures, but doubt that her words will slow the tide. Like footprints on a deserted beach, they’ll soon be forgotten.

 

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Comment balloon 16 commentsJohn Mulkey • November 22 2009 04:33PM

Comments

The one thing that we can do is try to stop the foreclosure and decline in values by getting some of these properties sold at Short Sale.  It's kind of like chasing a bouncing rainbow but it can help but I don't know how much difference it will make on the nation.  More local then nationwide.

Posted by Barb Van Stensel about 8 years ago

Barb - Short sales will benefit if the banks will move faster, and the modification efforts could make a difference if they were structured differently.

Posted by John Mulkey, Housing Guru (TheHousingGuru.com) about 8 years ago

According the NAR prices should go up 4% for 2010.  Now I'm confident they are smoking illegal substances and let's just leave it at that.  I guess you just have to 'wade thru' all the supposed economic indicators and decide for yourself.  I personally don't see much happening in my market of Chicago.  'Inadequate' is an understatement on Warren's part for the loan modification process.  It's just plain old smoke & mirrors if you ask me.

Posted by Lyn Sims, Schaumburg IL Area Real Estate (RE/MAX Suburban) about 8 years ago

John - this is so contradictory to NAR Lawrence Yun's prediction that all will be well by the spring of 2010!

Posted by Yolanda Hoversten, Broker - O Fallon, IL Real Estate (Berkshire Hathaway HomeServices Elite Properties) about 8 years ago

Lyn - It's not just the NAR that's "smoking," Congress seems oblivious to the problem.  Of course, in the long-term we'll need millions of jobs to solve the overall problem, but something needs to be done to address the looming foreclosures.  Millions are in default right now.

Yolanda - I keep a file of Dr. Yun's "predictions" just to add a bit of humor to future posts.

Posted by John Mulkey, Housing Guru (TheHousingGuru.com) about 8 years ago

John,

Sub sections of the Las Vegas market, the lower end ones, are doing okay due to investor and first-timer activity. Otherwise things remain pretty stagnant. In the nationwide big picture I believe Warren is on the ball, it'll be a while before housing climbs back to "normalcy".

Posted by Esko Kiuru about 8 years ago

In Florida our inventories are down significantly from last year.  Sales of inexpensive homes and condos are brisk and often sell with multiple offers after only a few days or hours on the market.  That said though, there are so many grim statistics out there that I'm really not sure why all these homes are selling.  NAR's perspective is very unrealistic.  Unemployment is most likely still headed upwards, there are millions more foreclosures still on the horizon, massive inflation is on its way, and the government at all levels can think of nothing more but raises taxes and increase spending.  All this is a recipe for disaster.

Posted by Rob Arnold, Metro Orlando Full Service - Investor Friendly & F (Sand Dollar Realty Group, Inc.) about 8 years ago

It seems like a lot of people see the problem, but there's no leadership in finding solutions. 

Posted by Jon Budish (Resident Realty) about 8 years ago

John

I pretty much agree with  rob A.  on this one. Lots of folks are telling me things are realy looking good until you ask  "how's that bank account?"l

Posted by Trey Thurmond, College Station , Texas Homes (BCR Realtors) about 8 years ago

John,  We are seeing sales but not brisk ones.  The market has significantly adjusted in my area.  Most of the short sales or bank owned properties do need lots of work.  They only attract investors as a rule. 

From what I have heard the banks are sitting on plenty of inventory and releasing it a few at a time.  I have seen the number of bank owned properties drop in the last few months on the MLS.

Posted by Bonnie Vaughan, CNE SFR - Buyers/Sellers - Lackawanna & Surroundin about 8 years ago

Esko - Yes, there are pockets that are doing quite well--unfortunately there are far too few of them.

Rob - Politicians have little vision and no grasp of the real problem.

Jon - Few politicians seem to be aware of the depth and long-term implications.

Trey - We can't ignore the problem forever. Unaddressed, it will come upon us with a vengeance.

Posted by John Mulkey, Housing Guru (TheHousingGuru.com) about 8 years ago

Bonnie - The banks have millions of potential foreclosures--those who are in default but not yet in foreclosure--and will have to deal with them at some point.

Posted by John Mulkey, Housing Guru (TheHousingGuru.com) about 8 years ago

John,

I agree with you on short sales. Only if the banks move on them; doesn't seem to be case though.

Posted by Terry Chenier (Homelife Glenayre Realty) about 8 years ago

Short sales will help the situation.  Also, let me say... I love your picture so appropriate for the foreclosure "under water" description of the real estate market.  Good post.

Posted by Rosemary Brooks, The Mother & Daughter Realty Team (BMC Real Estate - 209-910-3706) about 8 years ago

John didn't you get the memo? If they say things are improving then they will. They have the power to just will it all bad things away. Okay I was just goofing with you. I agree that this is soon going to hit us over the head with a vengeance.

I don't see short sales bringing much in the lines of relief either. Like you said the banks would need to move faster.

Posted by Suesan Jenifer Therriault, "Inspecting every purchase as if it were my own". (JTHIS-Professional Home Inspection Team) about 8 years ago

Terry - Yes, short sales could help, but the program would have to change radically.

Rosemary - Thanks for stopping by.

Sue - I guess I missed that memo. Perhaps they sent it when my computer was down :  )

 

Posted by John Mulkey, Housing Guru (TheHousingGuru.com) about 8 years ago

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