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The Fat Lady? She isn’t even in the building yet…..
And what Fat Lady would that be? A true turn around in the housing market. That’s who it would be.
Mark Zandi at Moody’s Economy.com said in an interview today that the housing market was poised for another downturn. Why?
- Foreclosures fell as more and more mortgage servicers tried to do loan modifications to keep people in houses.
- That has resulted in price gains in the last few months.
- When you combine that with the sales that we “borrowed” from the future by means of the tax credit, created some semblance of an improving market.
- But upwards of 50% of the loan modifications are failing and correspondingly will end up in foreclosure.
- So foreclosures are going to be increasing over the next 12 to 24 months.
- And we all know what happens to house prices when more foreclosures hit the market.
If Mark is right, we aren’t even half way through the trials and tribulations of the housing market.
Like I said, the Fat Lady, you know, the one who sings at the end? She isn’t even in the building yet.
Stay tuned,
Tom Vanderwell
Housing Market Meltdown Not Over: Zandi – Real Estate * US * News * Story – CNBC.com
The meltdown of the U.S. housing market is not over yet, and home prices will soon start trekking downward again as a flood of foreclosures looms, a well-known economist said Wednesday.
Mark Zandi, chief economist at at Moody’s Economy.com in West Chester, Pennsylvania, said in an interview with Reuters home prices will resume their decline by early next year as foreclosure sales pick up again…….
The index peaked in the second quarter of 2006 and hit a trough in the first quarter of 2009, a drop of about 32 percent. Home prices in many regions have been rising.
That is because foreclosure sales fell over the summer and fall as mortgage servicers have tried to put stressed homeowners into the Home Affordable Modification Program and other modification plans, he said.
“This lull in foreclosures sales has resulted in the price gains in the past few months,” he said.
“Foreclosure sales will increase, and home prices will resume their decline by early 2010 as mortgage servicers figure out who will not qualify for a modification,” he said.
Zandi said 7.5 million foreclosure sales will have taken place between 2006 and 2011. The majority of these sales, however, have not emerged yet, with 4.8 million foreclosure sales expected between 2009 and 2011.
Technorati Tags: Foreclosures, House Prices, Opera, Fat Lady Singing
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