Even though the housing market seems to have recovered from the 2008-2012 foreclosure crisis, things are not always as they seem! Let’s take a look at why the housing market recovery situation is an illusion and what this means for the housing market!
The Housing Market Recovery Situation Is An Illusion???
I want to share an experience with you just the other day in regards to the housing market recovery situation. I was searching the MLS for a client who wanted to sell their home in Alaqua Lakes. Keep in mind this is an upscale development in our area that is close to Lake Mary. I was astonished to find that there are a total of 3 million dollar homes listed as a short sale. This is surprising to me. The reason is that generally in the United States there is a shortage of housing inventory and entry-level buyers can’t find a reasonably priced home. This causes bidding wars and buyers end up settling for a less than desirable home in the pursuit of just being able to purchase a home in the first place.
Why Is There a Lack of Inventory?
You are probably wondering why there is a lack of inventory in the entry-level housing market, and upscale market homes have to short sell their home. Allow me to jog your memory about the foreclosure crisis of 2008 that lasted until 2012. During this period of time, the government intervened and artificially stopped the foreclosures by ordering the banks to pull them off the market. However, this is a temporary band-aid. The problems of homes that are in serious delinquency have yet to be solved. You may be surprised to learn that there are still homes, a lot of homes actually, that are occupied, yet there hasn’t been a mortgage payment made in years.
What Does This Mean for the Housing Market?
Yes, home prices are rising because there is a shortage of inventory, but how about the homes which are just sitting there? According to Fish Rating Systems, in Florida as of August 2018, 33 percent of home loans are in serious delinquency. In Hawaii, the numbers rise to 67 percent and in the United States, a total of 25 percent of home loans are delinquent. In short, yes, the housing market has recovered, but certainly not in the best way, which would be organically. The rising tide lifts all boats is the concept behind the process. Hopefully, the rising tide will not wash us all away like it did in 2008. I am here to help you with all of your home buying and selling needs! Have a wonderful week, Gitta!