Read it at Dr. Housing Bubble
The housing market is clogged like backed up plumbing in an old building. The shadow inventory is still very present even though visible inventory declined last year. It seems like we are diving back into the rabbit hole where information is disguised and bad news is spun as being good. Take for example the number of homes actively in foreclosure. Early in 2009 we had roughly 2,000,000 homes actively in foreclosure. The number today? 2,000,000. The Catch 22 of the giant bank bailouts and financial shell game was the bet (hope) that housing prices would have gone back up after five years especially with trillions of dollars funneled into the banking sector. I mean what can go wrong when you trust banks with housing right? The reality is sinking in that home prices are going nowhere but down unless household incomes rise and that is why we saw foreclosure starts surge last month. The shadow inventory is coming online and that means lower prices. Don’t think this is a shell game? Over 40 percent of the 2,000,000 foreclosures have not had a payment in two years. This isn’t even factoring in the 4 million delinquent loans that are working their way into the REO side of the equation.
Will 2012 begin the unclogging of 6,000,000 distressed properties? Over 40 percent of the 2 million active foreclosures stand with no payment in over two years and some with three years and more. Foreclosure starts surge 28 percent in last month of data. Mid-tier markets in Los Angeles and Orange County contract severely in 2011.
by Dr. Housing Bubble
BTW, Calculated Risk reports that LPS and CoreLogic both reported declines in house prices by 1% in January.