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 Foreclosures.com.
“Recovery is underway. Affordable is back in the housing market,” said Alexis McGee, president of Sacramento, Calif.-based 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.”
McGee notes that mortgage interest rates have fallen below 5 percent.
“With 4.5-percent fixed mortgage rates, housing prices lower than they were ‘pre-housing bubble,’ commodity prices lower, tax credits available for homebuyers, and the government eager to stimulate our economy, for the first time in years I can see prices rising again in 2009,” McGee said. “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.”
The latest U.S. Foreclosure Index numbers showed November foreclosure filings in California dropping to 15,978, down 6.55 from October and off nearly 50 percent from September.
The California market is a leading indicator for the industry, McGee said.
In November, another perennial leader in foreclosures, Arizona, saw its filings drop (down 5.19% and 5% respectively), according to U.S. Foreclosure Index numbers.
“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. 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 Realtor numbers actually show existing home sales picking up in about 20 percent of the areas studied. 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 are abound. The bottom line to keep in mind: What goes down absolutely positively will go back up again,” McGee said.
“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 said.