Foreclosures Won't End Soon, Analysts Predict

Rising unemployment and falling home prices is a treacherous combination that is dragging people with excellent credit into the foreclosure morass.

The jobless rate of 4.4 percent in April of people with bachelor’s degrees isn’t high compared with the overall unemployment rate, but it is more than double what it was a year ago.

Foreclosures are unlikely to peak until 2011, says David Crowe, chief economist of the National Association of Home Builders. He says foreclosures typically hit a high after unemployment does, and he believes the employment situation won’t turn around until late this year. Then rising employment will drive up interest rates, he fears, causing more resets of adjustable rate mortgages, leading to more foreclosures.

Credit Suisse echoes Crowe’s concerns, predicting that scheduled resets will hit a high in 2010 and rates will stay high until 2012.Source: Business Week, Peter Coy (06/15/2009)

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Inventory Houses Fall

The inventory of homes for sale in 28 major metropolitan areas served by ZipRealty Inc., was down 3.9 percent at the end of May.The ZipRealty data is compiled from local multiple-listing services where the firm operates and doesn’t include New York City. It also doesn’t include many of the foreclosed homes owned by banks.Compared with a year ago, the May inventory was down 24 percent. Historically, inventories have been flat between April and May, according to Zelman & Associates research firm.Housing economist Thomas Lawler said the decline in inventory combined with slow housing starts "indicates that home prices in many parts of the country could be nearing a bottom."
To check out great inventory on foreclosures and short sales (Hot Buys) and even leases do a search on www.RoxanaGreenman.com for your area of interest including Newport Coast Real Estate, Newport Beach Real Estate, Corona Del Mar, and Irvine Real Estate.