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The Unreported Positive Side of the Real Estate Market



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By : R Smith    99 or more times read
Some would-be home buyers may hesitant to commit because of real estate news that presents a negative picture of the housing market. However, there are two sides of a coin, so it’s fair to also point out the heads up side of unreported real estate trends.

First the negative real estate reports:

  1. It has been estimated that there may be up to 8 million foreclosures by the end of 2012.

  2. Up to 18 million homeowners might owe more than their house is worth by 2010.

  3. The inventory of distressed homes for sale could double the current volume by the end of 2012.

  4. Home prices in some areas may possibly drop an additional 10% or more.

  5. New home starts could drop by 67% compared to the peak of the construction market.

The positive real estate trends:

  1. Mortgage loans funded within the last year have a lower risk of default because lenders have gone back to conservative underwriting guidelines, which creates market stability.

  2. Mortgage interest rates should continue to remain low, which contributes to market stability with qualified borrowers buying or refinancing to affordable fixed payments.

  3. Home prices are coming back down to reasonable levels which provides opportunities for first time home buyers and other buyers to participate in the housing market again.

  4. Government purchase of mortgage backed securities should have a stabilizing effect on the housing market and provide more funds for home purchasing and refinancing.

  5. As more qualified people buy homes because at reduced prices and low mortgage rates, home values will stabilize and housing will recover sooner.

It’s been said that predictions are difficult, especially if they're about the future. Pundits and prognosticators offer their opinions, peddling both sides of the issue. Some back their claim with complicated spreadsheets, and others with simple logic. Whether your view is half empty or half full may depend on your local area market and how you are personally affected.
Written by Rick Smith: mortgage loans and offers on San Diego new homes.

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