Housing Market Recovery will take Longer than Expected
While most Americans are probably right to believe that the economic crisis is over – keyword, crisis – experts are now predicting that a full recovery is still a long ways away.
Home and property values are still in decline, exacerbated by the overwhelming number of empty homes on the market. With so many foreclosed homes available at dirt-cheap prices, prospective buyers are staying away from real estate, thus keeping the housing market in a perpetual state of decline.
Experts expect property values to continue dropping as vacant foreclosure homes bog down the market.
Since 2007 over 7 million homes have been foreclosed on. Perhaps the worst news of all is that these experts believe at least 7 million more foreclosures will occur over the next 5 years.
In the aftermath of the robo-signing/ foreclosure scandal it is taking an average of 565 days to process these claims, as courts across the country are log-jammed with foreclosure proceedings. In the state of Florida
that number is up over two whole years before these homes are being turned around and put back on the market.
Studies show that over 4 million Americans who are seriously delinquent on their home loan mortgage
payments are still living in their homes. 2/3rds of these homeowners haven’t made a payment in over a year. 1/3rd haven’t made a payment in over two years. Yet, due to the sloth-like pace of foreclosure proceedings these homeowners are remaining in their homes.
The majority of these homeowners are caught in upside-down mortgages, where due to the depreciation of home values they now owe more on their mortgages than what their homes are worth.
President Obama’s plan to help homeowners stay in their homes – the Home Affordable Modification Program
– has been extraordinarily disappointing, and economists now believe the housing market will have to wait for unemployment to subside to make a full recovery. Estimates are a slow improvement over the next five years.