Americans continue to grapple with uncertainty about the housing market, with 58 percent of U.S. adults expecting recovery to be at least another two years away,[IMAGE]
according to the results of a new survey conducted by ""Trulia"":http://www.trulia.com and ""RealtyTrac"":http://www.realtytrac.com, which tracks homebuyers' attitudes toward foreclosed homes. One in five consumers believe it will be 2015 or later before we see a housing recovery.
As a result of the recent robo-signing debacle, nearly half of U.S. adults surveyed said they now have less faith in mortgage lenders and banks. Thirty-five percent believe the robo-signing issue will delay the housing market's recovery, and 24 percent of those surveyed say they have lost faith in the government because of the way the robo-signing mess has been handled.
Pete Flint, co-founder and CEO of Trulia, stressed in a conference call with reporters announcing the survey results that consumer confidence is key to a healthy housing market.
""Government incentives have come and gone and historic lows in interest rates have done little to spur recovery,"" Flint said. ""Then, as if prospective buyers and sellers needed more to be concerned about, the robo-signing issue caused a Ã¢â‚¬Ëœwhat's next?' fear to surface in the minds of consumers who, frankly, have lost faith in banks and their government to make good decisions.""
Rick Sharga, RealtyTrac SVP, told reporters that the best thing the government can do right now to support housing is to create more jobs to ensure people can continue making mortgage payments and keep their homes and to get more buyers into the market.
Sharga says the most likely scenario that will play out as a result of the industryÃ¢â‚¬â„¢s affidavit problems is that weÃ¢â‚¬â„¢ll see massive fines levied against some of the servicers being investigated, with some possibly facing criminal prosecution.
But in terms of foreclosure sales themselves, Sharga says the impact will be Ã¢â‚¬Å“very minimal,Ã¢â‚¬Â in both judicial and non-judicial states. He notes that there have been some temporary delays in sales timelines as REO homes were pulled from the market to allow for proper case reviews, but Sharga says there hasnÃ¢â‚¬â„¢t been a single case so far[COLUMN_BREAK]
where a foreclosure has been completed and the property subsequently sold that has been overturned as a result of affidavit errors.
Sharga expects the robo-signing scandal to have a dampening effect on fourth-quarter sales in general in terms of artificially low numbers, but again he argues that the net effect will be Ã¢â‚¬Å“minimal.Ã¢â‚¬Â
Flint says the robo-signing mess might rear its ugly head again in the new year, but he believes it will effect the market in a good way. Flint thinks itÃ¢â‚¬â„¢s likely the investigation by state attorneys general will lead to more widespread utilization of foreclosure alternatives by servicers, such as short sales, which in turn would serve to deter strategic default and allow the market to more quickly absorb the most distressed properties.
Both Flint and Sharga are of the same mind as consumers in projecting the long-awaited housing upturn. They peg the recovery to begin taking shape between 2013 and 2014.
Flint notes that 68 percent of consumers surveyed by Trulia and RealtyTrac say it will be at least two years before they buy a home, closely in line with the time span most Americans anticipate for a recovery to take hold. HeÃ¢â‚¬â„¢s also forecasting long-term mortgage rates to continue to creep up to at least 5 percent by 2012, a hike that he says may push some buyers out of the market, further depressing demand.
With demand already weak, sales activity will continue to be volatile through next year, Flint says, but he notes that real estate is Ã¢â‚¬Å“hyper-localÃ¢â‚¬Â and the recovery of individual markets will be too. Several markets have proven particularly resilient to home price declines, and Flint expects them to be exceptions to the slow-recovery rule, namely Oklahoma City, Oklahoma; Austin, Texas; Omaha, Nebraska; Salt Lake City, Utah; and the Raleigh-Durham region of North Carolina.
Sharga says he expects at least another 5 percent decline in national home prices, before residential values begin to recover in 2014, primarily because consumer appetite will be too weak over the next couple of years to absorb the already engorged supply of homes for sale.
Even though he says the industry might get back to a somewhat balanced level of foreclosure activity by 2013, Sharga maintains that with a large number of delinquencies still hanging over the market, compounded by economic hurdles such as high unemployment, there will be an extremely taxing inventory of distressed properties to work through for years to come.
Sharga says RealtyTracÃ¢â‚¬â„¢s data shows that 2010 will be another record year in terms of foreclosure activity and the number of homes taken back by lenders. He estimates more than 3 million homes will have received a foreclosure filing by the end of the year, eclipsing last yearÃ¢â‚¬â„¢s tally of 2.8 million foreclosure filings, and about 1.2 million homes will have been repossessed.