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If you are in the mortgage or loan modification business, maybe even the debt settlement business you certainly have an eye on the real estate market. I am still amazed at how much the bottom fell out of this market.
When will it turn around? There was some small victory-dancing going on last Friday as the National Association of Realtors told us July existing home sales were up 7.2%. So, we are out of the woods?
Probably not…
The Zillow blog had a good article by Stan Humphries, Zillow’s Chief Economist that might give us a better reality check.
Existing home sales may not be the best indicator to watch:
“As I noted last month though, a key number that we should be keeping our eye on is the inventory level of existing homes for sale.”
Housing inventory increase is matching sales increase:
“In June, the troubling issue was that the increase in the pace of existing home sales was almost matched by an increase in the rate at which homes were being added to the existing inventory (i.e., people putting their homes on the market). That month, 521,000 homes were sold and 481,000 homes were added to the for-sale market.”
“In July, this pattern got even more lopsided with more homes being added than were actually sold during the period.”
Some believe and I agree this new inventory is flush with foreclosures adding more price pressure. It seems that loan modifications have just been an interim stop-gap.
Are banks finding it more efficient and economical to go the foreclosure route-despite the government incentives? I would love to hear from a loan modification expert.
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- U.S. Home Sales Rose for a Third Month in May (nytimes.com)
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- Homeowner confidence shrinks in the West (lansner.freedomblogging.com)
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