A recent real estate review report by RealtyTrac stated: “An estimated 1 million foreclosure-related notices for defaults, auctions, and home repossessions that should be filed by lenders this year will be pushed back until next year.” Sellers can expect prices to remain deflated for another three to four years, optimistically. It remains to be seen for how long. In order to get out of the recession, interest rates will rise. “Overall, the number of homes repossessed by lenders in the first half of this year dropped 30 percent compared to the same period in 2010,” the article continued. USA Today recently announced that foreclosure notices have fallen to their lowest level since 2006. They also reported that 1.2 million homes received a foreclosure notice. USA Today went on to say that “banks have almost 900,000 properties already on their books, so if the ones on the market aren’t selling, there’s little incentive for them to take back more homes that will end up sitting vacant.”
Prices are predicted to decrease through the first two quarters of 2012. Decreased prices will force more homeowners into a position of negative equity. Being underwater is one of the reasons that cause people to strategically default on their mortgage payments. If this continues, there will be an increase in the number of foreclosures and cause a setback in consumer confidence.
According to the NAR’s chief economist, Lawrence Yun, the housing market is slowly recovering with a predicted 4% increase in sales for 2012. Celia Chen of Moody’s Analytics projected sales to increase over 20% in 2012. The next six months will reflect if the rumors about the possibility of a loss of consumer confidence hold water. Consumer confidence, as measured by the University of Michigan, has seen modest improvement in the last few months after taking a dip over the previous months. A hit in consumer confidence can have an impact on the Real Estate rebound.