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Real Estate: Why home prices won’t bottom out

Posted by on Nov 19, 2011 in Business, Economy | 3 comments
Housing Market

The housing market has been hit in areas hardest where there is not a large price accumulation.

The U.S. home market is yet to fully start recovering. Problems continue to pressure it despite ten real estate markets leading the path towards general recovery and stability said the National Association of Realtors. The slow economic recovery resulted to new defaults and foreclosures after 5 continued quarterly drops. October foreclosures went 14% higher from 2nd to 3rd quarter, said Realtytrac.

It may not be like the 2007-2010 foreclosure pattern but it has to stop in areas that are hit the hardest where homes have already lost more than half their value. Sounds like a good time to buy but uncertain employment and stricter lending standards are discouraging buyers. Third quarter jobless rates were above 10%. Realtor.com’s 6 out of 10 top turnaround towns (4 are Florida’s largest cities) are yet to fully recover. While at its lowest, home mortgage rates at 8% are relatively higher than home prices. Buying cost that includes 4% interest rate and the 3.9% home price dips scare buyers away.

Unemployment, high housing count and foreclosures also affect areas that are without extreme price accumulation. Price decreases were established by Realtor.com in cities like Chicago, Detroit and Atlanta. Remortgage America is asking the government to grant mortgages at 1% for Americans to finance a new or existing home. Some wish Fannie Mae and Freddie Mac to take and auction foreclosed homes or sell them in a big fire sale. About a quarter million American taxpayers help sustain the two agencies which came under the U.S. Treasury in 2008. Their fate, whether to be restructured, liquidated or privatized, is yet to be decided upon by the Obama Administration. Another solution to the housing problem is to have foreclosed homes offered in rent-to-own contracts with reasonable leases toward a purchase.

About 3.4 million foreclosed homes will be listed in banks and mortgages companies’ records by December. While regulators, banks, mortgage companies and state attorneys general attempt to clear mortgage changes, properties will not be properly priced until all government limits on sales and re-financing are lifted.


  • Mark Coble

    Real wages anyone? That is one of the problems. Another is that no on knows who holds your mortgage note and is the “holder in due course”. Don’t believe me…call your “pretender lender”  or servicer and ask them some questions…..where is the original mortgage note? Where can you see the original mortgage note? (NOT a copy) Who is the beneficial owner of the mortgage note? You WILL be lied to as the customer service rep has a script that is full of misrepresentations, at best, or full of lies, you decide! Try it if you really want to see what all the “fuss” is about. Bank Fraud at the highest!

  • Anonymous

    If you move and sell the home before you have recouped the costs, you won’t end up receiving a financial benefit from refinancing. Use our refinance calculator to help you decide. Check out 123 Refinance calculator to find your refi rates in seconds.

  • http://twitter.com/CancunGuidebook CANCUN TRAVEL GUIDE

    We began looking at property here in Manhattan and were trying to focus on where the market was lowest, in which neighborhood. While we were answering ads placed by seller’s brokers, we didn’t start to find better prices until we found a buyer’s agent via http://www.manhattan-condos-for-sale.com/ and then we started finding short-sale property as well. The problem with markets not being able to recover have to do with the seller’s agreeing to set prices in the ads at high levels. However this is artificial because there are still so many homes on the market that are owned by banks. Of course the prices don’t show what the value is in those homes either, because banks are extremely slow in reacting to offers. I think that the only way a true market can get prices established properly, is if the homes that banks own, are auctioned off, even if they go for lower prices than what they, the banks want. Then at least there will be real home owners with the deeds, and prices can then, and only then, get set in a proper market value atmosphere. I think for us, the problem here in Manhattan is different, because there aren’t as many bank owned properties. The issue is really where seller’s tell their brokers to set their prices, and the brokers comply. This has prevented a steady sale of apartments based on true market value because many co-ops prevent sales from taking place if they decide the price is too low. So in our opinion, prices here in Manhattan have yet to find their bottom as well, and we fear that there will be more banks taking over property as people are prevented from selling their apartments at a fair market value.