Homeowner Confidence Still Low

The media tells us that the housing market has stabilized, but homeowners aren’t so sure. A recent report by Zillow.com shows that homeowner confidence has dropped in the second quarter of 2010. One-third of homeowners believe that home prices can still go lower.

Nationwide, only 24 percent of homeowners think their home has increased in value in the past year, even though 34 percent of homes are actually worth more than a few months ago.

Perhaps some of the reason is because many believe that the economic recovery is temporary. The nation as a whole is indeed teetering on the brink, with the national debt closing in on the gross domestic product for the first time since the Great Depression. Many economists are predicting a second dip, and even a full-blown depression, as early as 2011.

On the other hand, history shows that significant economic recessions and depressions tend to result in American’s feeling less secure for decades to come. How many of us recall the oddly frugal habits of our parents or grandparents that were a direct result of the Great Depression? Many of their generation didn’t even trust banks to hold their money and instead invested their savings in jars buried in the backyard.

Zillow’s report also showed that “27 percent of homeowners believed their own homes’ values would increase in the next 12 months, 35 percent believed they will stay the same, 12 percent expected a decrease and 26 percent did not know.”

Western homeowners, including those here in Arizona, who do expect a rise in home values, are hoping for a 10 percent jump. Northeastern homeowners also expect that 10 percent, but the rest of the nation is coming in closer at a hopeful 5 percent.

There are also many homeowners who want to sell their house, but have not had any success or just haven’t bothered. They are waiting for sure signs of stability and rising prices to put their homes on the market.

Unfortunately, the potential of 3.8 million new homes on the market could cause those rising home prices to slow or even stop. The higher the inventory, the more homes buyers have to choose from and the more sellers have to lower their prices. It’s a buyer’s market, but most homeowners want to see a seller’s market.

What can we expect? The housing market is sure to recover eventually, but that recovery may not be as fast as many would like to see. Zillow suggests for three to five years after “the bottom” that the housing market will grow at a very slow rate until the inventory levels out.

If you are in worried about the housing market, give the Curtis Johnson team a call. The Curtis Johnson Team is helping individuals who are facing foreclosure and those who are seeking their dream homes.

Go to www.CurtisJohnsonRealty.com or call 1-888-Curtis-J.

On the Brink of a New Housing Crisis? Foreclosure at Record High for Second Month

This beautiful Scottsdale home is a current bank-owned foreclosure. Interested in purchasing a home like this? Call the Curtis Johnson team!

The second plunge of the real estate market is beginning to rear its ugly head. For 2 months in a row, April and May, bank repossessions have hit a record monthly high. Nearly 94,000 properties in the United States were repossessed in May alone. Arizona foreclosures are the second highest in the nation. These numbers are an increase of 44 percent over a year ago.

These are not newly distressed properties, and many have been sitting empty for months—abandoned by their financially troubled owners—but the fact that these REO homes will soon cram the real estate listings is the real problem. When normal listings are placed side by side with bank owned repo’s the only way they can compete is by dropping their prices. If you are in no rush to sell your home, that’s probably not too troubling, but if you’re heading towards foreclosure yourself, or even just being relocated for your job, then you want a quick efficient sale. If your price can’t meet those of other homes, chances are that sale will be slow in coming.

Sure, Bob and Mary could walk into your home and immediately fall in love, realizing it’s the dream home they have always wanted, and after a little bit of haggling about the sales price you could be packing for your big move—but in reality this is a pretty rare event these days. You may have to drop the price of your home by $20,000 or more just to get some interested buyers, with offers coming in well below that.

What this means is that all homes will have their prices driven down again, more and more homes will go into foreclosure as financially distressed home owners are unable to sell them, relocated homeowners will be forced to rent out their home in order to carry two housing payments, and distressed neighborhoods could continue to become more and more blighted.

I’m afraid that the government’s attempt to salvage some of the housing market in the past has only increased the problem now. The Home Buyer Tax Credit kicked the market into action, but since it has stopped so has the market. Slow home buying activity combined with an increase in bank repossessions is combining for what will soon be a very unpleasant situation.

Want to get your home sold quickly before the market plunges deeply? Contact the Curtis Johnson team to learn more about our Quick Cash Options. Looking to invest? It’s an investor’s dream right now and we have many properties to suit you. Call the Curtis Johnson team today!

Go to CurtisJohnsonRealty.com or call 1-888-Curtis-J.