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A Slow Rebound
February 1st, 2012 10:57 AM

Sellers can expect at least two to three more years before markets are back into balance.  Distressed listings, such as short sales and bank foreclosures, typically sell for 20% below market value, which can cause a drag on home prices overall.

From a recent article in Realtor Magazine:   "The sharp price discount on today's distressed sales is a symptom of an imbalanced housing market.  In better times, a distressed property might be snapped up at market value.  Consequently, the market needs stronger sales volumes to reduce the numer of homes on the market and stabilize prices. 

By far the best remedy for the ailing housing market is a stronger economy.   Job growth and stock market gains are closely tied to consumer confidence, with consumers commonly citing concerns about jobs as the main reason for not purchasing a home.  Also, ongoing concerns that Europe's debt crisis could spread and reduce domestic economic growth, a lack of consensus in Congress over the deficit reduction plan, and a major revision to economic growth in the first half of 2011 combined to send stocks on a roller coaster ride in the second half of 2011. 

On a brighter side, both MLS inventories and shadow inventory showed signs of easing at the end of 2011.  Short sales have become easier to close, and the foreclosure inventory is being reduced.  Government programs aimed at helping struggling homeowners are being revised with the hope that many more homeowners will benefit in the future.   Distressed inventory will continue to be reduced as home prices firm and employment grows."

The next few years will continue to be a challenge as sales have most likely changed forever from the wild, wooly days of the housing boom. 


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Posted by Barbara Doeringer on February 1st, 2012 10:57 AMPost a Comment

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