The Housing Market has not bottomed and there is really no sense of talking “bottom” until 2012. Although there are good deals to be had, always remember that current events (as in vacancies) form future trends in price (as vacancies rise so do defaults) Any short term blip in the home market is just that, cyclical. Eventually, the headwinds of the chart below come back into play. No market goes straight down or up. Do not be fooled into thinking the housing market is in recovery.
In the US housing market there are still over a $1 trillion in mortgage resets to work through, 90% of which will be defaulted upon and foreclosed. This chart shows resets increasing from here with peaks in 2010 and 2011/2012 in the range of $30 to $45 billion monthly. The chart also shows subprime resets are still going on, but decreasing in frequency over the rest of 2009. However, prime resets and resets on loans to people with decent credit scores but special circumstances (stated income) are heading straight up through early 2012.
Just find where we are on the chart (Sept 09), and realize that 90% of the loans to the right will go into default. There is your answer on what shape the housing market will be in for the next 3-4 years. Anyway you look at it, the trajectory is down for now when it comes to the housing market.
There is no surprise here as there is no plausible alternative result given the statistical data above. There is nothing to spin here. Anyone with a pulse and eyeball can see the trend. 
U.S. Home Vacancies Rise to 18.8 Million on Defaults (Update1)
By Kathleen M. Howley
Oct. 29 (Bloomberg) — About 18.8 million homes stood empty in the U.S. during the third quarter as banks seized properties from delinquent borrowers and new home sales fell in September.
The number of vacant properties, including foreclosures, residences for sale and vacation homes, rose from 18.4 million a year earlier and 18.7 million in the second quarter, the U.S. Census Bureau said in a report today. The record high was in the first quarter, when 18.95 million homes were vacant. The homeownership rate, meaning households that own their own residence, stood at 67.6 percent.
The worst U.S. housing crash since the Great Depression has led to a record number of foreclosures and shaved almost a third off property values. The S&P/Case-Shiller Index of 20 cities in August was 29 percent below its 2006 high, after rising for four consecutive months.
“We are bumping along the bottom of the housing market,” said James Lockhart, vice chairman of WL Ross & Co. and the former director of the Federal Housing Finance Agency. “There is the potential for another swing down.”
Sales of new U.S. homes fell 3.6 percent in September to an annual pace of 402,000, the Commerce Department said yesterday. That was lower than the 440,000 median forecast of 75 economists surveyed by Bloomberg News.
![Reblog this post [with Zemanta]](http://img.zemanta.com/reblog_e.png?x-id=b6c9e748-9138-4787-9f13-9a7cfeefc446)
Related posts:
