BAP Blog Report: Housing Market to hit bottom this year

Rick Sharga, an executive vice president withCarrington Mortgage Holdings reported that the U.S. housing market will hit bottom this year and remain flat until 2014. He further stated it will start to slowly recover. It looks like their is a possibility that the market will bump along the bottom for some time before starting to revive. More than a million foreclosure actions that should have taken place this year have not yet moved forward, and that could delay a resolution of the housing market’s problems into next year and beyond. The data came from RealtyTrac. We most likely see home price appreciation until we work through all these distressed assets. Since 2005, there’s only been one quarter in which U.S. banks have sold more properties than they've taken back through foreclosure, leaving a huge overhang of real estate-owned assets that need to be cleared out. Banks hold about 800,000 REOs, and three-quarters of those are not listed for sale, said Sharga. Another 800,000 homes are in foreclosure and 3.5 million loans are delinquent. This "shadow inventory" will slow down a housing market recovery, he said, as monthly foreclosure numbers will remain elevated through 2012 and REO inventories will stay high through 2013.