Although many believe the national housing market has bottomed,
it will likely continue to lag with a massive oversupply of homes this
year, according to report published by John Burns Real Estate
The report, published earlier this month, said many people are
unaware of the massive supply of homes that are already in the
foreclosure process that will certainly drive home prices down
even further when they are sold.
“We have been projecting a ‘W’ shaped recovery for some time,
and we are becoming even more convinced that we are right,” the
firm said. “The shape of the second leg down is almost completely
dependent on the level of government intervention that will take place.”
Also, banks have been slow to foreclose on homes and sell them,
which has resulted in few distressed sales in comparison to the actual
level of distress in the market. This delay in REO sales, along with
historically low mortgage rates and an $8,000 tax credit, has helped to
stabilize the housing market – temporarily.
Based on the latest statistics, the housing market in 2010 will likely
remain in a depressed state.
• 13.54 of the 44.7 million mortgages tracked by the Mortgage Bankers
Association are delinquent.
• 10 percent of all homeowners in the country are delinquent.
• Based on historical trend analysis by Amherst Securities, 6.94 million
homes that are already delinquent will be liquidated, which is more than
a one-year supply of distressed sales poised to hit the market sometime
in 2010 and 2011. During the first quarter of 2005, that figure was only
• Defaults continue to grow at the rate of approximately 300,000 per
month, assuring that the number of distressed sales will grow and will
continue through 2012.