Economists Say that Housing has finally Hit Bottom

 The great housing depression of 2006 to 2010 seemed like it would never end. It began in September of 2006 and relentlessly tumbled year after year without an end in sight. However, now for the first time experts are starting to see the signs that we have finally hit bottom and they are optimistic that recovery will begin quickly.


Christopher Thornberg, founder and principal of Beacon Economics says that a high level of affordability is likely to drive demand up and reduce the stock of excess inventory, which will ultimately result in the need for new housing, a rise in home prices and a resumption of new construction.

Jordan G. Levine, manager of Beacon Economics Research says, "While prices may fluctuate modestly over the next several months, we believe the worst of the housing crisis is behind us. We expect prices to stabilize around current levels and likely be higher in the next 12 months."

This news is welcomed by the downtrodden, underwater homeowners who have been searching for any sign of relief after watching their property values perpetually free fall since the crisis began.

On the brighter side of this downturn, those who are lucky enough to be potential buyers are waking up to find the rain has stopped and housing bargains have fallen from the heavens all around. The housing market in many parts of Florida is sitting at an astounding 50% below construction cost.

“I can’t say if the market is really at the bottom or not,” says Ed Cooper of Port St. Lucie, “but it’s so close that I don’t think it even matters anymore. I don’t know how people can go wrong when they’re buying a 2,100-square-foot home that’s 3 years old, for $50 a square foot.”

Anyone hoping to cash in on a deal had better start now, because to add a spark to a match, October’s 30 year mortgage rates have hit a light-headed 3.875%, an all time record low in the history of Freddie Mac. For this reason most industry insiders are one by one coming to the realization that with the fantastically low housing prices coupled with miniscule mortgage interest rates the conditions are ideal for the entire housing industry to explode like a powder keg.

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re-blogged from our main Naples Real Estate Blog
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Foreclosure Halt aids distressed homeowners but creates problems for buyers



Photo by Jeff Turner

Numerous buyers with pending contracts on Florida properties have been halted to stop on their purchases due to the current foreclosure suspension. The decision of three major banks (Bank of America, Chase and Ally) to stop foreclosures temporarily was made amidst the public anger over foreclosures that resulted in illegal home seizures.

The lenders put a brake on foreclosures after some employees came out saying that they have been signing off on foreclosure documents without actually reviewing the file for correct documentation. This practice has been called "robo-signing", where bank officials would sign off on a foreclosure without reviewing each case's details, such as note, amount owed and the borrower. Some employees confessed to signing up to 10,000 affidavits a month, a number that would make it impossible for the employees to review each case.



Such negligence has the possibility to create title issues on the home, when it was repossessed improperly, it can't have clear title. Both Bank of America and Chase have stopped all the foreclosures including REOs in order to review the documentation and ensure that their properties have marketable title before any more transactions go through.



The issue here, however, is that there are buyers out there with pending contracts on Naples homes who are told to sign a 30 day extension in hopes of clearing it all out before 30 days are up. They have an option to exit the contract as well. Not only does it cause huge inconvenience to Naples buyers, but it also means wasted time and sometimes money on properties that right now CANNOT CLOSE.

Direct communication regarding this matter from Freddie Mac on one of our personal Naples home contracts in limbo reads:



Photo by James Callan

" Freddie Mac was recently informed of the existence of possible defects that may have occurred during the foreclosure of the subject property by their servicer, Bank of America that may raise questions about the insurability of the title of the subject property. The defect relates to the Affidavit of Indebtedness used in support of the foreclosure judgment. Until Bank of America has taken the necessary legal action to remedy any defects, Freddie Mac is unable to proceed with the marketing, sale, offer negotiation, and closing of the subject property. Should you wish to cancel your contract of sale on this property, we will promptly direct the refund or return of your earnest money deposit. However, should you wish to remain under contract and await resolution of this issue we will retain your earnest money and notify you when we can proceed with closing."

The effect this action will have on our already distressed market is unknown at the time. If the situation can be resolved relatively quickly and most buyers stay with their contracts, there'll be little impact. However if this matter drags out- we will see fewer homes on the market with buyers clamoring to put in a bid on the same properties. Vandalism and mold becomes an issue once again in our hot Naples Florida climate. The longer those foreclosed homes sit vacant , the more chance they have in developing mold and other issues, especially if A/C is not maintained.

At this point, all we can advise is this:

Buyers with pending contracts: Depending on your time frame, sit tight, extend the contract, while looking at other available properties in search for a better or comparable home. It's a tough situation and everyone's time frame is different, so it has to be approached individually.

New Buyers: Tread carefully. Keep in mind that some older listings might be a part of the foreclosure halt, so let your Naples realtor get more information before you proceed. Most of the halted properties should be withdrawn from the Naples MLS at this moment, however if you're viewing properties on other websites, remember that most websites don't have real-time updated. In doubt always refer to your Naples real estate agent.


Good Luck to all of us! We weathered the first and second foreclosure halt a few years ago. This should be a piece of cake

For more tips, subscribe to our weekly informative newsletter about real estate!


re-blogged from our main Naples Real Estate Blog

SW Florida Homes http://www.andrewollick.com/

SW Florida Luxury Homes http://www.oceanhomesrealty.com/

SW Florida New Homes and Builders http://www.newhomes-ae.com/