Price Gains May be Temporary

Blog by Distressed Asset Expert Attorney Ted A. Greene

–          Ted comments on a report that came out in the news on 4/19/2013

Yesterday Distressed Servicing News published a report by Fitch Ratings that seemingly threw some cold water on the newly found hot real estate market. This article explains why the recent uptick is based on artificial stimulus which cannot and will not be sustained.

The article listed the perfect storm combination of factors of why we recently saw a good jump up in home values. None of these factors were based on good economic news.

This dreary forecast predicts that prices will actually drop in the middle of 2014!

Here are the key points:

–          Unemployment is down ONLY because of people just plain giving up and falling out of the search for work and NOT because of good economic news.

–          Pent up demand – many people stopped looking when the housing crunch hit.

–          Ridiculously low interest rates.

–          Very little “new home” construction.

–          Investors buying homes for cash at an unseen pace.

The recent uptick has additionally caused some fence sitters to get back in but since they don’t have cash they can’t compete. They are struggling to find inventory which continues the uptick. Simple supply and demand factors at work.

Once the inventory level gets back to “normal”, and it always does seem to return then the basis for this article will materialize as predicted. They basically say we are in a mini bubble and it too will burst. I guess time will tell. I have never seen a market quite so unpredictable as we have seen the last few years and we aren’t done yet.

If you have any questions or concerns about your own personal situation I would be happy to give you a FREE one on one legal consultation. You can call me at 916.442.6400 or send me an email at tgreene@tedgreenelaw.com or just visit my website www.upsidedownca.com.

 

Ted Greene
California Attorney and
licensed Real Estate Broker

 Ted A. Greene

 

 

 

 

 

http://www.dsnews.com/articles/fitch-recent-price-gains-may-not-be-here-to-stay-2013-04-19