The article, Housing market diagnosis: Bipolar, from CNNMoney.com, reports that bipolar is what comes to mind when diagnosing the post-home buyer tax credit market. There are two separate forces pulling it in opposite directions, and experts aren't yet sure which path the market will take. On one hand, sales and prices are rising, indicating recovery. On the other hand, so are interest rates and repossessions, which most certainly do not. And then there are the millions of foreclosures that need to be sold but haven't yet been listed -- so-called shadow inventory -- that could derail a real recovery if they hit the market in floods.
The prognosis? Negative short term but turning positive by the end of 2010. One of market's biggest hurdles is getting beyond the lapse of the $8,000 home buyer tax credit. Thanks to the incentive, buyers scrambled to beat the April 30 deadline, pushing new home sales up nearly 30% in March. "In the months immediately following the expiration of the tax credit, we expect measurably lower sales," said Lawrence Yun, chief economist for the National Association of Realtors (NAR). But there is one factor that has experts really scared: homes that are ready to be sold but haven't been put on the market. Right now, there could be more than 4.5 million homes in "shadow inventory," according to a recent report by Barclays Capital. This so-called shadow inventory is a recent phenomenon. In the past, inventory was either tight or it wasn't. But now, with home prices so low and so many foreclosures on the market, both homeowners and banks have been waiting to put properties on the market. But as more sellers put their homes up for sale, supplies increase, which will depress prices again. Rinse and repeat ad infinitum.
Here is a link to the article
http://money.cnn.com/2010/05/17/real_estate/housing_market_direction/index.htm
No comments:
Post a Comment