Foreclosures rise
As the number of foreclosure filings hit historic highs, studies and statistics show staggering results. Of the 130.6 Million housing units in America, 18.9 Million homes are vacant as of the end of December 2009, according to the U.S. Census Bureau. That’s more than the entire population of Greece and Israel combined!
The Census Bureau also reported that national vacancy rates in the fourth quarter 2009 were 10.7% for rental housing and 2.7% for homeowner housing and that the vacancy rate for rentals was higher than the fourth quarter 2008 rate of 10% but just barely (at 1%).
Some economists predict that we haven’t hit bottom yet and predict more homes will be lost despite the Obama Administration’s attempts (through what some call a failing program known as HAMP) to help sinking homeowners. Others forecast that we are currently bouncing at the bottom and that 2010 is the year of recovery. What say you?
Mike
February 3, 2010 at 6:42 am
As an agent that has listed a decent amount of REO’s, this is one of my biggest complaints, of many, that the banks and servicers are making. During the many moratoriums and delays in the actual foreclosure of the properties, the banks should have been sending the eventual listing agent or property preservation rep out to the property to check occupancy. If the property is vacant, GET IT ON THE MARKET already! For those that think that a shadow inventory does not exist, I can assure you that it does. I have an upscale property that has been under contract for 2 months as we work out the plumbing issues due to the property being vacated prior to the winter of 2008. It was not FC on untill September of 2009. Another duplex that I have now, was vacated sometime prior to April of 2009. It was FC on in late december. Only about 30% of my FCs have been occupied. The longer they are vacant, the more problems that occur. Once the electric is off, the sump pump doesn’t work, and bad things can happen. The longer it sits, the more taxes and HOA dues that will need to be paid. The banks are not handling any of this well.
Anne Lackey
February 3, 2010 at 7:57 am
I think we still have a way to go. Rental vacancies are very high, rental rates are being depressed, investors who can’t loan mod/refinance or fill their vacancies are being added to the foreclosure mix. I think 2010 will be another challenging year.
However, I do think the housing prices have fallen about as low as they will go. I just believe that there will be more of them. I certainly believe that the shadow inventory exists as I watch the number of foreclosures as well as what is being dripped into the market. Huge difference in the numbers. Those houses are somewhere… Great post!
BawldGuy
February 3, 2010 at 8:04 am
The bottom? Depends upon what region. Using the macro outlook though, we’re two rest stops and a dinner away from Grandma’s house. Meaning? 2010 will be OK to better than OK. From then on the odoriferous matter will hit the spinning steel blades. Many more homes will be lost.
The degree to which things will get better or worse, sooner or later, depends entirely on the ideological base on which the country’s leadership acts. If we keep careening down the same unlit, pothole strewn road, the light at the tunnel could very well be a freight train coming our way.
Brad Officer - Jacksonville Short Sales
February 3, 2010 at 8:23 am
My opinion: We are not at the bottom
The amount of homeowners attempting to get a MOD through the HAMP program is staggering. Add the failure % for the modification and you have a massive amount of homeowners who are close to just walking away. Compile the HAMP failure factor with the amount of job losses or drops in income and I believe we are still on the way down.
Joe Loomer
February 3, 2010 at 9:58 am
half agree with Bawld Guy – 2010 may end up statistically OK – but I think it will only be because of a warm start due to the Tax Credit extension/expansion. But it all is indeed macro-level to the REALTOR boots on the ground…
Post-April should be on par or below 2009 numbers. FHA tightening and unemployment seem to be portents of a bleak third and fourth quarter. At least locally – barring a major industry or other commercial venture deciding on our area.
Navy Chief, Navy Pride
BawldGuy
February 3, 2010 at 10:04 am
Hey Joe — You could be spot on. I was speaking in more or less ‘net’ terms.
One factor which hasn’t been discussed much, if at all, is the market’s anticipation of the automatic tax increase coming on New Year’s Day 2011. Together with all the other drags on the economy, that one alone could be the final straw. There’s nothing like guaranteed tax hikes to influence human financial behavior before the fact.
andreslucero
February 3, 2010 at 11:33 am
As a complete outsider to the real estate industry, anecdotal evidence suggests that things will get worse before they get better.
NPR’s Planet Money podcast recently had an interesting episode about strategic defaults—people who are walking away from their undervalued homes, even when they can afford to pay the mortgage. When this type of behavior makes economic sense, the country is definitely still in trouble.
npr.org/blogs/money/2010/01/podcast_to_walk_away_or_stay.html