Why Are We Seeing More Foreclosures?

Why Are We Seeing More Foreclosures?   What will happen now that the moratorium on foreclosures has ended? Are we about to see a tsunami of foreclosures and a struggling market similar to what happened in the real estate market crash of 2008? The short answer is no—foreclosures will start to increase again but not enough to worry over. Today I’ll go into more detail and explain why increasing foreclosures don’t spell doom for the market. At the beginning of the pandemic, many thought that a housing market crash would surely happen, but it didn’t. In fact, because of the combination of government support, low interest rates, and eager homebuyers, we experienced a housing boom. However, the various foreclosure moratoriums that protected people from financial disruptions during the pandemic are now ending. As a result, the number of foreclosures is now increasing again. “Frustrated buyers will eventually have more options available to them.” The number of foreclosure notices has increased by 219% since January 1. According to ATTOM Data Solutions, the number of properties that had foreclosure filings is up 153% compared to the same time period last year. Due to the tiny number of foreclosures over the last few years, the large increases we’re seeing now may look alarming on their own, but in context, this spike is a momentary blip as the market begins to normalize.  Rick Sharge, Executive Vice President of market intelligence at ATTOM, said, “Foreclosure activity across the United States continued its slow, steady climb back to pre-pandemic levels in the first half of 2022. While overall foreclosure activity is still running significantly below historic averages, the dramatic increase in foreclosure starts suggests that we may be back to normal levels by sometime in early 2023.” How are these normalizing foreclosure levels going to affect the market? 1.75 million homeowners are still protected by forbearance programs, but it would not take that many foreclosures to alleviate our extremely tight housing market. According to the National Association of Realtors, only 1.37 million units are currently available for sale, which is the lowest inventory level since data started being tracked in the 1980s. Frustrated buyers will eventually have more options available to them, but it will take many months of foreclosure increases for buyers to truly see a glut of inventory. If you have any questions about the end of forbearance programs, the rise in foreclosures, or anything else about our shifting market, don’t hesitate to reach out by phone or email. I’m happy to help.   Written by Ruby Miranda on November 1, 2022. Posted in Market UpdateTags: Foreclosures, Houston, Ruby Miranda Trackback from your site. Leave a Reply  

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What You Should Know About Our Slowing Market

What You Should Know About Our Slowing Market   Why our housing market is slowing and how it affects your home. Is the real estate market slowing? You may hear about this on the news or from your friends, and many of my clients have asked me this question. With the recent interest rate hikes, everyone wants to know if the market is slowing. In short, yes. The market is slowing, but not as much as you think. We’ve seen a dramatic change in our market recently. Inventory increased significantly in April, according to both Zillow and Realtor.com. The chief economist at Realtor.com notes, “If the trends we’re seeing now hold true, we could potentially see year-over-year inventory growth within the next few weeks.” At the same time, buyer demand also decreased. The number of new mortgage applications fell in April for the third month in a row, and existing home sales dropped 2.4%. Without a doubt, the market is starting to shift from the hot, pandemic-fueled one we had for the last few years to one that favors buyers slightly more, and there are a few main reasons why we’re seeing this change. First, as you may already know, the Federal Reserve has started fighting inflation by raising rates. Mortgage rates have risen around 2% to 3% since the start of the year and may continue to climb. That has a direct effect on buyers by making it more difficult to afford a home. As a result, demand has fallen.  The market might be slowing, but it’s still a good time to sell your home.  On top of rising rates, we’re also seeing a surge in newly-built homes and altered zoning laws aimed at increasing the housing supply. As the Biden administration notes, more homes will be built this year than any since 2006. So the market is slowing down, and the primary cause is increased interest rates. How does all of this affect your home? The drop in buyer demand has already led to immediate changes like fewer multiple offers on properties. In April, Redfin reported that only 60.7% of its offers faced competing ones, which is down from where it was a year ago at 67.4%. Home prices are still increasing, but some experts predict that prices could flatten soon as inventory increases and demand falls.  Keep in mind that this doesn’t mean our market is crashing. Most experts agree that poor lending practices were the cause behind the 2007 crash, and today’s lending standards are much tighter. However, it’s important to keep the context of our market in mind. Home prices have risen 34% over the past two years, and while inventory is increasing, it was still 48% below pre-pandemic levels in April. The market might be slowing, but it is still a very good time to sell your home. If these trends continue, now may be your last chance to sell near peak demand and get the most for your home. If you need any help selling your home or just want to ask some questions, I’d be more than happy to help. Feel free to call or email me.    Written by Ruby Miranda on September 28, 2022. Posted in Market UpdateTags: homeownership, Market Update, Real Estate Trackback from your site. Leave a Reply  

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Is the Market About To Crash?

Is the Market About To Crash? Here’s why you don’t have to worry about a market crash anytime soon.  Selling in the greater Houston area? Get a market analysis report Purchasing in the greater Houston area? Get full MLS access Are we heading into another housing crash like 2007? I receive this question from clients all the time. This market may feel similar to that one due to rising prices, but there are a few major factors that make our market very different from 2007’s.  Housing crashes are very rare throughout history, so it takes an extreme set of circumstances for one to occur. In 2007, loose lending practices meant that practically anyone could get a loan, even if they couldn’t afford it. When prices fell, many homeowners had no equity in their homes, so they had to go into foreclosure. This flooded the market with cheap inventory and brought prices down even further.  Today homeowners’ equity is at an all-time high. New home construction has lagged behind, is more expensive, and is focused on higher-end homes, so it will take a long time for supply and demand to balance. Meanwhile, many buyers are paying in cash or are properly qualified for their loans. Given these factors, our market will remain strong for a long time.  If you have questions about today’s topic or anything else, please call or email me. I am always willing to help! Written by Ruby Miranda on May 31, 2022. Posted in Market Update Trackback from your site. Leave a Reply

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