9/20/10

U.S. Home Prices Face 3-Year Drop as Inventory Surge Looms - Bloomberg

The slide in U.S. home prices may have another three years to go as sellers add as many as 12 million more properties to the market…

“Whether it’s the sidelined, shadow or current inventory, the issue is there’s more supply than demand,” said Oliver Chang, a U.S. housing strategist with Morgan Stanley in San Francisco. “Once you reach a bottom, it will take three or four years for prices to begin to rise 1 or 2 percent a year.”…

Fannie Mae Forecast

Fannie Mae, the largest U.S. mortgage finance company, today lowered its forecast for home sales this year, projecting a 7 percent decline from 2009. A drop in demand after the April 30 tax credit expiration “suggests weakening home prices” in the third quarter, according to Fannie Mae…

8 Million

Douglas Duncan, chief economist for Washington-based Fannie Mae, said in a Bloomberg Radio interview last week that 7 million U.S. homes are vacant or in the foreclosure process. Morgan Stanley’s Chang said the number of bank-owned and foreclosure-bound homes that have yet to hit the market is closer to 8 million…

In addition to the as many as 8 million properties vacant or in foreclosure, owners of another 3.8 million homes -- 5 percent of U.S. households -- said they are “very likely” to put their properties on the market within six months if there is improvement, according to a survey</a> by Seattle-based Zillow.

“This has the potential to create a sawtooth pattern along the bottom,” Stan Humphries, Zillow’s chief economist, said in a telephone interview. “Homes begin to sell and a few sidelined sellers rush into the marketplace and flood the marketplace.” …

The Obama administration’s effort to help mortgage holders, HAMP, is another source of future inventory as owners with new loan terms re- default, Ritholtz said. About half of the modifications done in 2009 were behind in payments by the first quarter of 2010, according to the Treasury Department…

 

Read the full article by clicking the link below…(if you dare)

U.S. Home Prices Face 3-Year Drop as Inventory Surge Looms - Bloomberg

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Smith Farm, Lake Worth Florida...Foreclosure tracker

Smith Farm, Lake Worth Florida...Foreclosure tracker
As of 4/1/10 the are 94 Smith Farm homes in some stage of foreclosure.
 
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