07/03/2022
https://nypost.com/2022/06/24/us-housing-market-price-correction-to-hit-coast-to-coast-moodys-economist-warns/
I like this article because it provides perspective on the housing market we are currently in and where the market experts think the maket is going. My opinions are below in brackets[ ]. I have linked my sources and indicate quotes taken from the articles.
[The housing market has been nothing short of a Rollercoaster, covid shutting down lumber mills causing home building materials prices to rise, govt legislation preventing foreclosure processing(home shortage), govt spending fueling inflation, rising gasoline prices increasing consumer household and industry products. The end result is a prolonged synthetic sellers market. Below Fed Chair Jerome Powell acknowledges if you are an average prospective homebuyer you are having a difficult time trying to buy a home based on market conditions. What is more interesting, is what this says about those buyers who are above average buyers. Prospective home buyers with the advantage of excess cash won the muliptle offers battle, but at what cost?]
Quote:
"I’d say if you are a homebuyer, somebody or a young person looking to buy a home, you need a bit of a reset,” Powell said. “We need to get back to a place where supply and demand are back together and where inflation is down low again, and mortgage rates are low again.” -Fed Chair Jerome Powell"
[Mark Zandi acknowledges that home prices will decline but says that the a housing market crash like 2008 is unlikely citing today's vacancies rate and stable lending.]
Quote:
"Although attom data reports 22,360 U.S. properties started the foreclosure process in March 2022, up 35 percent from the previous month and up 248 percent from March 2021.
Lenders completed the foreclosure process on 4,406 U.S. properties in March 2022, up 67 percent from the previous month and up 180 percent from March 2021
Source: ."https://www.attomdata.com/news/market-trends/foreclosures/attom-q1-2022-u-s-foreclosure-market-report/
Quote:
"While a price decline in key markets is likely, Zandi downplayed the possibility of a sweeping crash in housing on par with what transpired during the subprime mortgage crisis of 2008 — when risky lending practices led to a collapse in the market. The price drops are expected to be relatively low.
Zandi noted that available inventory is still historically tight, with housing vacancies at all-time lows this time around rather than the all-time highs posted during the last crash. Mortgage lending is also far more stable than it was a decade ago.
I just don’t see the kind of mortgage defaults and distressed sales that would be necessary for big declines in housing values. That’s when you get crashes, when you have lots of foreclosures and a lot of distressed sales,” Zandi says. “That’s just not going to happen.”- Mark Zandi, chief economist at Moody’s Analytics
Source: ."https://nypost.com/2022/06/24/us-housing-market-price-correction-to-hit-coast-to-coast-moodys-economist-warns/,"
2008 perspective:
Quote:
"RealtyTrac® (realtytrac.com), the leading online marketplace for foreclosure properties, released its 2008 U.S. Foreclosure Market Report™, which shows a total of 3,157,806 foreclosure filings – default notices, auction sale notices and bank repossessions – were reported on 2,330,483 U.S. properties during the year, an 81 percent increase in total properties from 2007 and a 225 percent increase in total properties from 2006. The report also shows that 1.84 percent of all U.S. housing units (one in 54) received at least one foreclosure filing during the year, up from 1.03 percent in 2007."
Source:
https://www.google.com/amp/s/www.hoalawblog.com/amp/2008_us_foreclosure_market_rep/
[We are not even close to millions of foreclosure fillings, but I think it is understated how much foreclosure units entering the market are going affect market prices. The effect being significant. In my opinion we have entered the transitional phase from a sellers market to buyers market]
The scorching pandemic-era US housing market is on the verge of a “coast to coast” price correction as the Federal Reserve hikes interest rates, a prominent economist warned this week. Mark Zandi, …
