Skip to comments.Zillow Housing Forum and The Bearish View
Posted on 10/15/2012 1:28:25 PM PDT by ExxonPatrolUs
At last weekend's Zillow Housing Forum, bearish real estate advisor Mark Hanson suggests that recent positive housing data is only a small fleeting bump driven by government stimulus. Hanson argued there is a substantial "shadow inventory" that will come on the market. He mentioned 6 million mortgages are delinquent and that millions of modifications will default as the "new subprime". 23% of Obama's HAMP modifications have already defaulted. Hanson talked about the high "Back-End Debt-to-Income Ratio" even after modification, were borrowers have substantial debt payments in addition to their mortgage payment (student loan, car, other installment loans). In the most recent HAMP report, the back-end DTI was 53.6% after modification.
I bet a job would improve those DTI scores
Ntaionwide numbers are pretty meaningless in real estate. The market will continue to be flat in most areas. The shadow inventory thing is overblown if you’ve been through more than one of these contractions.
The lack of new home construction makes up for a lot of the shadow inventory, which consists of a lot of homes that are cheap, investor properties in this climate. And investors will buy them as their prices hit the feasibility level.
There will soon be a shortage of decent, modern single family-homes for sale. That’s already the case is some markets.
Yep—about 20 more years of us Baby Boomers crapping out and leaving millions and millions of empty houses. Yep, yep, yep, yep, yep, yep, yep,...