Apparently the rising home prices that some of us have gotten used to over the last few months are not as glorious as we had imagined. Alyssa Katz, author of “The Coming Foreclosure Flood” tells us that far from glorious the rise in home prices is just an illusion. Katz calls the 1.8 million homes on the road to foreclosure, the “shadow inventory”, this is what has fooled us into seeing an increase in home prices. What we don’t see is the shadow inventory. Over a million American homes in which the owners have fallen behind on the mortgage or simply stopped paying. We are currently at a standstill as mortgage servicers’ as well as the courts are backed up trying to get through all the recent foreclosures. The shadow inventory is equal to half the size of the entire market, it will take almost three years to sell all the houses defined as shadow inventory. We should expect housing prices to plummet quickly when the entirety of the shadow inventory enters the market. What does that mean for us? Some areas of the country will be hit by these foreclosures much harder than others. Fortunately in the state of New Hampshire our houses have retained their value for the most part. Not feeling so sure? Take a look at the New Hampshire Association of Realtors January 2010 Residential Sales Report. Statewide unit sales have increased by 16.5 % and median sales have grown statewide by 7.5 %. This shows that most people are comfortable buying/selling in NH, let’s hope it stays that way. Good luck with your real estate endeavors!
We're lucky in NH. We've avoided the worst of the housing problems, mostly, I've heard, because banks here didn't get into the "get rich quick" mindset of the rest of the country.
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