ForeclosureS.com: Housing Markets Will Roar Back in 2009

The nation’s foreclosure hemorrhage has finally slowed and 2009 should see a significant decline in foreclosures as buyers return, pushing home prices up and fueling a real estate recovery, according to the _2009 Outlook_ from California-based ""ForeclosureS.com"":http://www.ForeclosureS.com.
""Recovery is underway. Affordable is back in the housing market,"" said Alexis McGee, president of ForeclosureS.com. ""In 2009, housing will not only recover, but we’ll see buyers leap into this market in droves, depleting our housing oversupply, and actually put higher price pressures on the market.""
According to McGee, the Treasury Department's proposal for 4.5 percent fixed mortgage rates, along with housing prices that are now lower than they were ""pre-housing bubble"" and new tax credits for home buyers, all mean that prices will start rising again in 2009. ""This is a great time to buy properties for investors -- to buy properties at wholesale prices below today’s already low prices -- rent them out for positive cash flow and then sell them for big profits in late 2009 once price appreciation kicks in,"" McGee added.
The latest U.S. Foreclosure Index by ForeclosureS.com shows a slight drop in the number of properties repossessed by lenders following foreclosure. The number of REOs, or lender-owned real estate, fell from 84,534 in October to 84,291 in November. And that number is off nearly 21 percent from September’s 106,415 REO filings, ForeclosureS.com said. According to the foreclosure tracking company's market data, year-to-date, 12.6 of every 1,000 households nationwide have been lost to foreclosure.
""Certainly some of the drop reflects growing results of government and private efforts to keep homeowners in their homes,"" said McGee. ""But the recovery takes shape when you factor in other things like what the National Association of Realtors calls ‘solid’ gains from a year ago in existing home sales in some key areas, and the fact that many of the same areas are seeing dropping home prices. Fewer foreclosure actions were initiated in the last quarter, too, according to the latest Mortgage Delinquency Survey from the Mortgage Bankers Association,"" McGee noted.
""California is a great example of what’s happening now and what lies ahead for the housing sector,"" McGee continued. ""Long a leader in the subprime mortgage mess and rising numbers of foreclosures, the state’s foreclosures have slowed significantly.""
The latest U.S. Foreclosure Index numbers show November REO filings in the state of California down to 15,978 in November, 6.55 percent fewer than in October and off nearly 50 percent from September. Home prices there have come down too, as much as 39.4 percent compared to a year ago in some areas like Riverside-San Bernardino-Ontario, according to ""National Association of Realtors"":http://www.realtor.org (NAR) figures. That’s left many homeowners that bought their homes at high price points with upside down, or underwater, mortgages—they owe more than the value of the home. But it’s also made homes more affordable for plenty of other people, and solid, and in many cases rising, existing-home sales support that, McGee said.
In November, another perennial leader in foreclosures, Arizona, saw its REOs and pre-foreclosure filings drop (down 5.19 percent and 5 percent respectively), according to U.S. Foreclosure Index numbers.
The pre-foreclosure picture when averaged nationally isn’t quite as bright. Pre-foreclosures include notice of mortgage default and/or foreclosure auction. Amid all the negative economic news, pre-foreclosures for November were up 5.57 percent from October, with 27.1 of every 1,000 households across the country facing some kind of foreclosure action, according to ForeclosureS.com. All in all, 177,254 pre-foreclosure filings were recorded for November, compared to 167,906 filings in October. Still, based on the analysis from ForeclosureS.com, November numbers are down more than 7.5 percent from this year's high recorded in March.
""Pre-foreclosure numbers will likely climb in early 2009 (albeit at a much slower rate than in 2008),"" McGee said. ""Too many homeowners already are just too overextended and likely won’t seek help to work out their delinquent mortgages until after a pre-foreclosure filing against their property. That filing, it seems, is the wake-up call for many to get the help they need and sell,"" McGee explained.
McGee says, though, that as the year progresses, she expects bright spots to emerge, both in terms of foreclosure numbers and within regional housing markets, as efforts to work with strapped homeowners really begin to take root.
""I wish my crystal ball could pinpoint everything that’s going to happen with housing markets in the next 12 months, but there are just too many variables,"" McGee said. ""What I can tell, though, is that hardest hit housing markets have already hit bottom and others will follow in 2009.
""Third-quarter National Association of Realtors numbers actually show existing-home sales picking up in about 20 percent of the areas studied,"" McGee continued. ""And, given the uncertainty and volatility of the stock market combined with all-time low interest rates, extremely affordable low-priced homes, and all the choices out there, 2009 is an excellent time to buy real estate. Properties, especially foreclosed ones, will be highly discounted, lenders are motivated to work with buyers, and the opportunities abound. The bottom line to keep in mind: What goes down absolutely positively will go back up again.
""The return of solid housing markets is an important part of restoring stability to financial markets. The market will return when mortgage rates and home prices are down, and that's exactly what is happening now in the hardest-hit areas of the country,"" McGee added.