To say the residential real estate market is at a crossroads is the understatement of the current economic recession. After several months of gains in new and existing home sales, as well as price stabilization in some of the hardest hit local markets, the question going forward is: Can this housing “recovery” be sustained?
Taking into account the fact that most of the real estate data we report is seasonally adjusted, fall is still considered the slow season in real estate. Families are tied to the school calendar and younger, single business executives may be waiting for year-end bonuses.
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This fall, the residential market is facing additional
headwinds. The expiration of the $8000 first-time home buyer
tax credit at the end of November, which has added an
estimated 200,000 buyers to the market, will undoubtedly take
its toll. Realtor and home builder lobbyists are hitting
Capitol Hill hard, and while several bills to extend and even
expand the credit are on the table, budget-wary
representatives are questioning continued housing
stimulus.
Rising foreclosures are also riling the recovery, with various moratoria expiring and banks and servicers pushing properties through the system more quickly. Inventories of unsold homes, new and existing, have been falling over the summer months, but a new wave of foreclosures could reverse what was thought to be a promising trend.
Make no mistake, the government’s Home Affordable
Modification Program is putting a dent in potential
foreclosures, with over 500,000 trial modifications underway
and more than 45 servicers participating. But with rising
unemployment, fewer borrowers are qualifying for the
much-needed modifications. The Treasury’s Assistant
Secretary for Financial Institutions, Michael Barr, admits,
“that challenges remain in implementing and scaling up
the program.”
Finally, the mortgage market is still standing at odds with housing’s recovery. Much-needed mortgage reform is protecting housing’s future, but it’s a double-edged sword.
New rules for appraisals are slowing the mortgage process,
and higher standards throughout the industry, and even the
Federal Housing Administration is pushing some potential
borrowers out of the market.
“On the whole, the new borrowers are at risk of not
being able to be served, as FHA and the private mortgage
insurance industry come under stress,” notes industry
analyst Howard Glaser.
It’s a buyer's market, for those with good credit and
substantial money to put down. Consumer confidence is gaining
slowly, and investors are definitely draining excess
inventory from the very low end of the market.
A real, sustained housing recovery will be slow to build, and
unemployment is arguably one of its greatest impediments, but
there are unprecedented opportunities in today’s real
estate landscape; all it takes are the right tools,
information and expertise to find them.
Here's what we have in our guide to help you through that process.
Buyers And Sellers
