Key to improvement in home values
I remember relying on the Supply/Demand curve for along time. The United States continues to grow, rising prices and absurd credit standards stimulated over investment in housing. The correction has been painful for many home owners and their banks. The entire nation, and arguably the entire world economy was impacted. But alas, there will be a day when people have no choice but to buy a home or sleep on streets. Recovery has never been a question, but a matter of timing. I still think that is a pretty good argument.
All of us in the industry understand the foreclosure rate, which seems to be slowing, or flattening, or retarding in most US Markets. This is a good signal, and has an impact on bank owned homes - also called Shadow Inventory. The banks have been (incompetent) slow at managing their inventory. Managing foreclosures is definitely not their sweet spot. It would be natural to banks them credit for releasing inventory slowly, but I have seen too many good offers that take 120 days for the bank to respond - and the seller gets frustrated or moves on.
Recently I have been pretty focused on the US Economic policy and the economic situation in Europe as a big issue. Economic strength and job creation has a major role on housing - more important than interest rates. Who knows what will happen.
Today, something new popped up on my radar. I guess that I had always known that if it is cheaper to own than to rent, people would be crazy to rent. This article from S&P is the first mention of the inflection point on rent vs. own. If the S&P has it right - we could truly be at the bottom of the housing decline - at least in some initial markets.
'via Blog this'