Real Estate Market Update: Homeownership and Foreclosures

by on Foreclosures

Real Estate on the Black Board

The real estate market is rather complex; therefore, when examining the real estate market crash and the recent progress toward recovery, there is not a single factor that comes into play. Instead, there are multiple. As a result, progress toward real estate market recovery is multi-faceted – simply addressing one issue will not result in full recovery.

Let’s take a look at some of the things that led to the real estate market crash and the current state of the United States economy and real estate market.

Factors Leading to the Real Estate Market Crash

There are many issues that led to the real estate market crash. First and foremost, lenders allowed those with less than desired credit to take out mortgages, which they essentially could not afford. Second, people kept assuming that home prices would always continue to rise, which is basically impossible (hence calling it a housing bubble).

At the same time, household income was dropping – making it harder for people to afford homeownership. Interest rates also came into play, which can be better understood by looking at an infographic that reveals the relationship between homeownership and household income as well as the median cost of homes and interest rates over several years.

At the end of the day, several things contributed to the real estate market crash; therefore, in addressing real estate market issues we must look at all contributing factors – not just foreclosures.

The Current Real Estate Market

Over the last few months, the real estate market has made progress toward recovery; however, as with most things in life the progress is not occurring as quickly as desired. Despite the slow progress, recovery is definitely underway.

Recent reports show that foreclosure inventories throughout much of the country are falling. Although some judicial foreclosure states, such as Florida, still have a high foreclosure inventory, the foreclosure inventory has reached the lowest level seen since April of 2010.

Some states, such as Nevada – the city of Las Vegas to be specific – are still struggling greatly. The unemployment rate is 12.1% and foreclosures still dominate much of the Las Vegas real estate market. Therefore, although some states are making progress toward recovery, other states are still behind due to judicial foreclosure processes.

Either way, nationally we are making progress toward real estate market recovery; however, fully addressing the real estate market involves taking into consideration everything from household income and unemployment to lender responsibility.

At the end of the day addressing the real estate market and speeding up progress toward recovery is not an issue with a single solution; instead, it is multi-faceted and must be attacked from all angles to obtain a quicker recovery.