Insightful Fact-filled Article on the Status of Residential Real Estate Market
There was a very informative article on Greenfaucet (investment site) by Michael Pento on February 10 The Reality Behind Real Estate. It's a good review of the status of some of the most important variables that affect housing values such as inventory, foreclosures, sales, homes built, etc. It isn't terribly optimistic about prices bottoming yet, but says the groundwork for a bottom is falling into place. The review is like so many others that view this housing cycle as similar to the others of the last fifty years. Regrettably, it isn't gong to be at all like the others for so many big reasons. One very significant factor that he missed is the huge number of owners who are upside down, now approaching 25%. Since about 50% of home purchases and sales traditionally have been by move-up buyers, that knocks out a huge part of potential demand for years to come in absence of a government program to relieve excess housing debt such as The AllStreets Bailout Plan. The other major variables he doesn't mention are the huge drop in the number of qualified buyers due to the drastic elimination of mortgage loan types and the difficulty of getting mortgage insurance, and the demographic megatrend that will keep providing more supply from retirees and dying boomer parents than demand from new buyers from younger ranks for years to come. I'd rather be more optimistic, but the facts just don't support being that.
Posted by The Mortgage News at 3/1/2009 4:05 PM 
Categories: bank bailout,Housing Values,Credit Crisis,foreclosures,foreclosure crisis,mortgage crisis,AllStreets Bailout Plan,upside-down properties,mortgage delinquencies,government bailouts,upside down mortgage,Main Street bailout
Categories: bank bailout,Housing Values,Credit Crisis,foreclosures,foreclosure crisis,mortgage crisis,AllStreets Bailout Plan,upside-down properties,mortgage delinquencies,government bailouts,upside down mortgage,Main Street bailout
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