Analysts: Market Recovery On the Horizon But Will Vary by Location

With about 800,000 REOs and about 1 million properties in some stage of default, according to Rick Sharga, EVP of Carrington Mortgage Holdings, it is difficult to see the light at the end of the tunnel.

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However, that is just what a group of four analysts â€" including Sharga â€" tried to do at a panel Monday at the Five Star MPact Mortgage Banking Conference and Expo.

""In every previous recession, housing has brought us out of the recession,"" Sharga said, but in this recession, ""it dragged us in."" As a result, he says, recovery this time will be a bit different.

""Inventory continues to outpace sales,"" Sharga said, and as long as this is the case, the market cannot recover.

However, Eugenio Aleman, director and senior economist at Wells Fargo, pointed out that the economy is growing â€" though the pace remains slow.

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Unemployment remains high, but the economy is adding jobs â€" slowly.

""In 10 years, we'll be saying, ‘Why didn't we buy a house today?'"" said Aleman. ""This is the best time to buy.""

While Aleman does not know for sure when interest rates and prices will rise, he is certain they will.

According to Sharga, foreclosures should have peaked this year, and recovery should have started in the coming year. However, foreclosure delays due to robo-signing have hindered this process.

Ultimately, market recovery will depend on a number of variables and differ greatly by locale, according to Eric Fox, VP of statistical and economic modeling for Veros Real Estate Solutions.

For example, in the New York metropolitan area, a projection about 12 months ago saw the market falling 3 percent, but this rate came with a 13 percent spread, depending on the type of property and neighborhood, Fox said.

Local variables contributing to and detracting from market recovery include price-to-rent ratio, population trends, affordability, school districts, and more.

Another factor contributing to market recovery is whether a state is a judicial or non-judicial state. Kostya Gradushy cites data predicting it will take eight years to clear the foreclosure inventory in judicial states and three years in non-judicial states.

_(Note: The Five Star is the parent company of DSNews.com and DS News magazine.)_