The housing market crisis is believed to have peaked during the first six months of 2010, with the number of REO foreclosures for sale declining considerably when compared with previous year's totals. However, real estate market analysts believe that the improvement in the housing market is only temporary.
Locally, foreclosed homes in Queens, NY have declined in number for the first time – along with the rest of most metro areas in the U.S. – since 2006. Data from the Mortgage Bankers Association showed that the second quarter of 2010 recorded the lowest foreclosure totals since four years ago.
Reports on the housing market have also shown that majority of New York foreclosed homes and foreclosed properties in other parts of the U.S. are not the products of subprime loans gone bad anymore, but are mostly related with prime mortgage loans that ended in default due to the high rates of unemployment.
The number of foreclosed homes all over the country is expected to continue rising for the rest of 2010 as mortgages that are past their due dates for at least three months have posted a 9.11% record for the second quarter of the current year. Although this is lower than the first quarter's 9.54%, it is still considered high and very near the 2009 fourth quarter peak of 9.67%.
Another factor that provides a glimpse of a negative future for the housing market is the fact that buyers are not too interested in plucking out REO foreclosures for sale and existing dwellings from the market. Existing home sales dropped by 26% in July 2010 compared with July 2009. When it comes to sales of newly built residences, the decline for July 2010 is 32% when compared with July 2009.
The current year's July figure for new home sales is the lowest ever recorded for the month since 1963 and represents a weaker than expected sales market. The poor sales numbers for the month are being seen by most analysts as a sign that home prices will drop further in the coming second half.
Analysts have also added that four million REO foreclosures for sale and other foreclosed properties are expected to be added to the total number of troubled residential properties in the country before the year ends.
John Cutts has been educated in the finer points of the foreclosure market over 5 years.