Mathews Associates

"Building Lifestyles for Life"

A LOOMING DOUBLE BUBBLE-PART 2

Posted by Dwight Mathews on February 18, 2010

I hate to say;  I TOLD YOU SO, but the very thing that I wrote about in an earlier post here on my blog, is now coming to fruition.  The Governments Brilliant, Band Aid,Bail Out, real estate market plan, to keep people in their home, was a stupid idea right from the start.  All it did was delay the inevitable that is now clearly etched in stone!

That looming shadow housing inventory I spoke about has now put the entire industry on edge.  In a recent report published by Standard & Poor’s (S&P) Tuesday confirmed that the hidden supply of REOs and pending foreclosures will likely take 33 months – or nearly three years – to clear if liquidation rates hold steady. [You can read the entire article by clicking on the link below.]

Even more unsettling, as the article went on to say , is the fact that their estimate is conservative because their analysis was based on the number of properties the company believes to be hidden in the shadow right now.  It doesn’t take into account any loans that have yet to show serious signs of distress.

“We believe that in reality additional loans will default in the near future due to the weak economic environment, distress residential home values, and the resulting contraction in the supply of mortgage finance”, further increasing the overhang of the shadow inventory, S&P said.

The rest of the article went on to say that the recent reversal in housing prices is the result of a temporary constriction in the supply of foreclosed homes on the market.  This temporary constriction came about due to loan modifications, court delays and political pressure to keep borrowers in their homes.  The growing number of borrowers who are delinquent but haven’t yet moved through the foreclosure process will further put pressure on property values and reverse the small gains that have been made.  S&P and Moody’s predict another 8% decline in prices over the course of this year.

MY TAKE & CONCLUSION:

A Strong Buyers market will continue through 2010.  Investors with cash and Boomer home buyers will dominate the market.  Anyone looking to buy a home or Investment property who has cash and/or excellent credit and a steady job will be in a strong position and in control of negotiating the best price and terms!

Whether it’s your first home, second home, vacation retirement property or your an Investor building long term wealth,  Mathews Realty Associates will work with you, One on One, Exclusively, as your Coach, Mentor and Financial Advisor.  Protecting Your Rights and negotiating, on your behalf, to achieve the best possible price and terms acceptable to you.

“It’s Your Money On The Table – Shouldn’t You Be The One In Charge Of The Buy”? ‘HIRE ONE FOR YOUR SIDE”

via S&P Estimates a Three-Year Overhang of Shadow Inventory.

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