Home Prices Will Continue To Plunge 2013 Will Be The Worst Year For Foreclosures

[Case_Closed]

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Always wanting to brighten up your otherwise shining pretty day....

Michelle Meyer, the well-known housing analyst for BofA/ML, has some bad news: The housing crisis isn't over.

In fact, in her 2012 outlook piece, she says it's "far from over" and that prices still have another 7% to decline nationally.

The basic problem: There are still tons more foreclosures or "liquidations" yet to come.

The most crucial input to our forecast for construction and home prices is our assumption for foreclosures. Our securitized products research team estimates another eight million homes will be liquidated over the next four years, which adds to the six million homes that have already been liquidated since 2007. All told, we expect 14 million foreclosures or a quarter of all homeowners with a mortgage.

Not only is the wav of foreclosure not close to over, but 2013 will actually be the worst year yet.

Why the acceleration in foreclosures? Basically because there's still an abnormally large backlog.

Currently, it takes between 25 and 30 months on average for a non-agency mortgage to transition from 60 days delinquent to liquidation, about double the amount of time it took back in 2008. The extended timelines reflect capacity issues with significantly more than normal mortgages in the pipeline, government mandated modification efforts and the nationwide investigation by the state Attorneys General on the foreclosure process. We assume that the latter is resolved in the near term.

The bottom line for prices:

National home prices have declined 33% from the peak in 1Q06 through 3Q11, returning to mid-2002 levels. In our view, this has left prices fairly valued relative to per capita income growth and rent prices. However, we expect prices to undershoot relative to fair valuation, declining another 7% from 3Q11 through 1Q13.

There is one sliver of good news. The construction industry has in fact bottomed she said and will contribute positive to GDP going forward.



Read more: http://articles.businessinsider.com/2011-12-03/markets/30471154_1_foreclosure-process-home-prices-housing-crisis#ixzz1g47oMIui

[dustup]

Realtors: We Overcounted Home Sales for Five Years
Published: Tuesday, 13 Dec 2011 | 5:21 PM ET

http://www.cnbc.com/id/45659547

Data on sales of previously owned U.S. homes from 2007 through October this year will be revised down next week because of double counting, indicating a much weaker housing market than previously thought.

CNBC.com
The National Association of Realtors said a benchmarking exercise had revealed that some properties were listed more than once, and in some instances, new home sales were also captured.

"All the sales and inventory data that have been reported since January 2007 are being downwardly revised. Sales were weaker than people thought," NAR spokesman Walter Malony told Reuters.

"We're capturing some new home data that should have been filtered out and we also discovered that some properties were being listed in more than one list."

The benchmark revisions will be published next Wednesday and will not affect house prices. [This is due to magic!]

[Case_Closed]

I've been telling you so.

[foodserver]

   
Re: Home Prices Will Continue To Plunge 2013 Will Be The Worst Year For Foreclosures

YES!  That's what I'm talkin' 'bout!  Now if only we can get gas back up to $4 per gallon...

[Pepsi]

yep.. the fundamental truth about our economic recovery is it will take years to dig out of the real estate bubble/crash culminating in 2007-2008.   

I'm Mr Lucky myself, we bought our house in 2007 and it's gone up 10% according to Zillow and sale price of similar houses in the hood.

[foodserver]

yep.. the fundamental truth about our economic recovery is it will take years to dig out of the real estate bubble/crash culminating in 2007-2008.   

I'm Mr Lucky myself, we bought our house in 2007 and it's gone up 10% according to Zillow and sale price of similar houses in the hood.

Good for you Pepsi!

[Case_Closed]

I'm Mr Lucky myself, we bought our house in 2007 and it's gone up 10% according to Zillow and sale price of similar houses in the hood.

Not to pop that bubble for you, Pepsi, but Zillow over the last few years has discredited itself.  It used to be highly reliable.  Those days = Gone.