Phoenix Hard Money.
Until the amount of distressed inventory returns to a normal level, under 5 percent, real estate pros face the unenviable task of clearing these sales as efficiently as possible.
By far the best remedy for the ailing housing market is a stronger economy. Job growth and stock market gains are closely tied to consumer confidence, with consumers commonly citing concerns about jobs as the main reason for not purchasing a home.
Behind the Drag
Ongoing concerns that Europe’s debt crisis could spread and reduce domestic economic growth, a lack of consensus in Congress over the deficit reduction plan, and a major revision to economic growth in the first half of 2011 combined to send stocks on a roller coaster ride in the second half of 2011. In August, consumer confidence fell to its lowest level since the recession began in 2007, and neither businesses nor consumers appear willing to drive the economy. Indeed, job creation has averaged less than 150,000 jobs per month over the last year, below the amount needed to absorb college and high school graduates entering the workforce.
Another factor keeping the level of distressed properties high is the so-called “shadow inventory,” the cache of homes not yet on the market but already—or likely to end up—on the balance sheets of banks, the FHA, Fannie Mae, or Freddie Mac and thus for sale.
On the bright side, both MLS inventories and shadow inventory showed signs of easing in 2011. In September 2011, an estimated 3.5 million homes appeared on MLSs across the country, 13 percent fewer than a year earlier. Meanwhile, from February 2010 to July 2011, the shadow inventory dropped from 1.9 million to 1.6 million, according to calculations by NAR researcher Selma Hepp. The reduced inventory was partly a result of firming home prices and employment growth that carried into 2011. Taken together, these factors lowered the national 90-day delinquency rate from 5 percent of all mortgages in the first quarter of 2010 to 3.5 percent in the third quarter of 2011. However, the foreclosure rate remains historically high. Not only that, the temporary moratorium on foreclosure sales by many large banks in the latter half of 2010 and early 2011 to correct processing problems held up the sale of a large number of properties that will eventually be sold. Phoenix hard money lender.
In all, short sales rose by 26,000 last year while foreclosures fell by 255,000, according to Hope Now, a mortgage industry alliance. September 2011 marked the 12th straight month in which foreclosure activity decreased on a year-over-year basis, according to RealtyTrac. In October, however, filings spiked 7 percent from the previous month, and the month-over-month activity was much higher in the housing markets of California, Nevada, Arizona, and Florida, where the downturn was sharpest, as well as in markets where the judicial process held up foreclosure sales. In a Nov. 10 press release, RealtyTrac CEO James Saccacio said, “The October foreclosure numbers continue to show strong signs that foreclosure activity is coming out of the rain delay we’ve been in for the past year.”
Government programs aimed at helping struggling home owners haven’t had the effect many hoped for, but some retooling is underway. In November, the Home Affordable Refinance Program program was revised with relaxed criteria that observers hope will double the number of home owners who’ll eventually benefit. Meanwhile, private Mortgage modifiers have shifted their strategy to focus on reducing monthly payments; the share of Mortgages that are six or more months in default 12 months after modification has improved, from 58.1 percent in 2008 to 26.6 percent in 2010. Phoenix Hard money lender.
It’s not too late to make distressed sales part of your repertoire. This special report looks at how these sales have changed since the wild, wooly days of 2008 and provides insights on how to run a successful short sale or foreclosure operation. Phoenix hard money lenders