What’s Really Happening in the Housing Market?

Luxury Home

Over the past couple of months we’ve had conflicted reports regarding the housing market. More foreclosures – less foreclosures, numbers up – numbers down, more houses sold – fewer sold. What’s really going on and why aren’t we getting the full story?

In the last couple of months, headlines have been proclaiming existing home sales were the highest in three years. Realists quickly pointed out investors who had cash, or people with sterling credit scores were buying, these sales were not your conventional sales. New and existing home prices actually fell in August-September 2013, although slightly higher than a year ago.

The truth is most of the existing home sales were foreclosed and/or short-sale homes and they were bought by cash-laden investors and flippers. (Short sales are where lender agrees to a sales price below amount of loan owed.)

Nearly 130,000 homes entered into the foreclosure process last month. Metro Denver increased 31.8% in foreclosure filings in July 2013 and statewide, increased 10.9% in June 2013. Colorado now ranks 26th in the nation in foreclosure activity (Nevada and Florida hold the top two spots).

First time buyers usually propel the housing recovery but those numbers are way down. The first time buyers are struggling to meet the higher credit standards and higher down payments. Adding to the struggle is the fact that unemployment is still high, wages are barely growing and millions of Americans can’t qualify for home loans.

The buyer traffic dropped off significantly in August pointing to fewer sales in the fall. Higher rates will also depress the market next year. The average 30-year fixed loan is 4.57% a full percentage higher than in May. The refinancing “boom” (if there ever was one) is at a standstill with the increase, even though that rate is still much lower than the 6 and 7% a few years ago.

Sales of new, single-family homes have had a huge drop of 13.4% since July, bringing new home sales to their lowest in a year. Building permits have also dropped considerably along with mortgage applications.

Construction of new homes may be up at present, but with the drop in sales, the inventory has increased as well. Unfortunately, this points to a future slowdown in new construction. Builders are reporting their frustrations by their inability to get credit from their lenders and by rising costs. According to the National Association of Home Builders, there are also problems in below-price appraisals.

One in five homeowners, or over 10.7 million homes nationwide are underwater at this time (owing more on their loan than their house is worth). There’s little hope for these homeowners who can’t move up to a nicer home as they realize it will take years to recover. Some underwater homes will never fully recover.

Additionally, banks have also been holding onto a huge number of “shadow inventory” which are foreclosed homes likely to be dumped onto the market in the next six months. Banks have been holding onto the shadow inventory in order not to glut the market and receive less money.

The bottom line is the so-called housing recovery is actually driven by investor buying. Speculative demand from investors is what helped create the last housing bubble.

The housing market has a huge impact on the nation’s economy and that market is actually slowing down instead. Unless lenders make it easier for first time homebuyers and loosen the strings on lending, our housing recovery will stall – again.

Keith A. Gantenbein, Jr. is a Colorado consumer advocate attorney, foreclosure defense and real
 estate attorney located in Denver and servicing all of Colorado. His foreclosure defense practice includes: foreclosure prevention, foreclosure assistance, loan modifications, short sales, and all other foreclosure
defense legal assistance. He also handles bankruptcies, wrongful credit reporting, mortgage negotiations, lender liability, real estate, civil litigation, debt defense, debt harassment, contracts and landlord/tenant.
 If you think you will be
facing debt collection, foreclosure, or are in the foreclosure process, or have had a wrongful foreclosure, contact Keith Gantenbein at (303) 618-2122 for a one-hour consultation where he will discuss your
situation and go over all your options with you.

About theglawfirm1

Gantenbein Law Firm is a Denver, Colorado Tax Law Firm, servicing all of Colorado. Gantenbein Law Firm also specializes in Colorado Real Estate Law, Colorado Foreclosure Defense, Wills & Trusts, and Business Law.
This entry was posted in Uncategorized and tagged , , , , , , , , , , , , , , , , , , , , , , , , , , , , , , , , , , , , , , , , , , , , , , , , , , , , , , , , , , , , , , , , , , , , , , , , , , , , , , , , , , , , , , , , , , , , , , , , , , , , , , , , , , , , , , , , , , , , , , , , , , , , , , , , , , , , , , , , , , , , , , , , , , , , , , , , , , , , , , , , , , , , , , , , , , , , , , , , , , , , , , , , , , , , , , , , , , , , , , , , , , , , , , , , , , , , , , , , , , , , , , , , , , , , , , , , , , , , , , , , , , . Bookmark the permalink.

2 Responses to What’s Really Happening in the Housing Market?

  1. Pingback: The Good, The Bad and The Ugly of Las Vegas Real Estate Market for September 2013 | TRADEWINDVEGAS

  2. Both you and the co-applicant will have to fill out all
    the details, and sign the home loan. First brokers tell
    you about different types of home loan schemes and also about its
    best features. Work on creating some a specific pink slip and you
    can get yourself a large sum of monetize a number of hours.

Leave a Reply

Fill in your details below or click an icon to log in:

WordPress.com Logo

You are commenting using your WordPress.com account. Log Out / Change )

Twitter picture

You are commenting using your Twitter account. Log Out / Change )

Facebook photo

You are commenting using your Facebook account. Log Out / Change )

Google+ photo

You are commenting using your Google+ account. Log Out / Change )

Connecting to %s