Recent housing indexes have shown single-family home prices are on the rise, providing more evidence that the “bottom” of the market may be behind us.
Some now suggest that the the market has turned the corner and that the so called “bottom” of the market was reached earlier this year. Since that time, housing prices in some areas have been picking up. Most economists did not expect any turnaround or upswing in prices after the $26 billion mortgage settlement with the nation's 5 largest banks. Expectations have been that a sizable surge in foreclosed properties could further deteriorate property values. So far we haven't seen any such surge and inventory of homes for sale is in fact low. The reduced inventory may in fact be helping to stabilize our battered housing market.
An increase in home values also leads to fewer homeowners being underwater or (owing more than the property is worth). That in itself could allow some sellers who may have fallen behind on thier mortgage to sell rather than walk away. The number of underwater homeowners actually decreased from 12.1 million to 11.4 million by the end of March this year according to data.
Realistically there are many homes in the foreclosure pipeline which will eventually come to the market in some fashion. It seems lenders may have more to gain by waiting for the market rather than rushing inventory out and in effect creating another housing crisis.
GES Real Estate, LLC