The housing market has shown some signs of bottoming, but the next wave of foreclosures could delay any sort of recovery.
The Chicago Tribune had good piece today on another wave of foreclosures that could arrive as soon as this summer. Lenders are now moving ahead with foreclosures that had been delayed by self-imposed and state-government moratoriums that expired in the past few months.
First-time home buyers and investors are responsible for the spike in sales, especially in hard-hit California, Florida, Nevada, and Arizona. But the inventory of bank-owned homes is now likely to grow, putting increasing pressure on already low prices. And the rising unemployment rate will only compound the situation.
“The rapid pace of layoffs is of particular concern,” the Tribune article reads. “Homeowners who have lost jobs have little chance of getting their mortgages modified. That puts many homeowners on a collision course with banks that are preparing to take a more aggressive stance on loan modifications.”
BusinessWeek editors Chris Palmeri, Prashant Gopal and Peter Coy chronicle the highs and lows of the housing and mortgage markets on their Hot Property blog. In print and online, the Hot Property team first wrote about the potential downside of lenders pushing riskier, "option ARM" mortgages and the rise in mortgage fraud back in 2005—well ahead of many other media outlets. In 2008, Hot Property bloggers finished #1 in a ranking of the world's top 100 "most powerful property people" by the British real estate website Global edge. Hot Property was named among the 25 most influential real estate blogs of 2007 by Inman News.