Valley housing market won’t recover until 2034
When it comes to housing, whether it's in the Valley or around the nation, the biggest question out there is: when is the market going to recover?
Money Magazine has a prediction that may surprise you. Arizona is listed as one of the top five worst markets and they are forecasting a recovery date of 2034.
Best Markets:
Oklahoma 6% of homeowners underwater, Recovery forecast 2009
New York 6% underwater, Recovery forecast 2016
Montana 7% underwater, Recovery forecast 2012
N.Dakota 8% underwater, Recovery forecast 2013
Alabama 9% underwater, Recovery forecast 2013
Worst Markets:
Nevada 70% underwater, Recovery forecast 2033
Arizona 51% underwater, Recovery forecast 2034
Florida 48% underwater, Recovery forecast 2031
Michigan 39% underwater, Recovery forecast 2022
California 35% underwater, Recovery forecast 2028
Realtor Kent Gagon said he thinks it will be more like 10 to 15 years if you define a full recovery by the balance of supply and demand when it comes to home inventory. He fears more people may choose to do what are called “strategic defaults”, essentially walking away from their homes because they are so upside down. This could make a slow-to-stabilize housing market even more sluggish. He has also already tracked a slowdown following the end of the federal government’s $8,000 tax credit for first time homebuyers. In just a little more than two weeks since the program ended he’s noticed supply going up and demand drop.
Mark Taylor of awesomerates.com is a mortgage expert who has also been charting similar trends. He strongly urges people to consider the impact walking away from your home can have on personal finances and credit. He said 13,000 people last month missed their first mortgage payment and statistics show many people who miss a mortgage payment wind up in foreclosure. The highest rate so far this year was February when 18,000 people didn’t pay, and Taylor suspects that is because that is the same month people start receiving their Christmas spending credit card statements.
It winds up being a vicious cycle, unemployment or underemployment leads to people finding it hard to make a mortgage payment. But according to the Mortgage Bankers Association, a high rate of foreclosures and people conducting “strategic defaults” are creating a drag on economic recovery further hampering local businesses from being able to expand and hire more people.
(By: Christina Boomer abc15)
