08.25Real Estate News from Maui, Oahu and rest of Nation
According to the Associated Press news network, an upcoming shadow inventory of distressed properties can delay housing market recovery. Large numbers of foreclosures and also real estate short sales will bring property values even lower. However, there is hope that the banks will be able to process and sell all remaining shadow inventory within the next four years or so. Also, the amount of not backed by the government mortgage loans has decreased from 433 billion to 405 billion dollars in just 90 days. Economists believe that the housing sector problem is slowly coming to an end. I know that this would be a relief for the maui and Oahu Real estate markets in general.
All in all, very strict lending standards will help decrease number of loan defaults in the future. However, now almost 8,5 percent of all homeowners are at list a month late with their mortgage payments, compared with 1,1 percent in a stable economy. It means that the real estate market still has a long way to recovery. Millions of foreclosures were delayed and people were able to stay in their homes because the banks were forced to revise all the paperwork to make sure it was done fairly. Many straggling homeowners became eligible for mortgage loan modification with some government assistance. I know that on the Oahu and also Maui real estate this was rather common overall except on the upscale market.
For their part, Government-sponsored lenders Fannie May and Freddie Mac own a majority of mortgage loans in today’s lending market. Number of defaults on FHA loans is much lower because these companies are very cautious with their lending. Experts are confident that in a long run, this approach will solve housing market problem. Right now the banks still have almost 5 million homes in a process of foreclosure and they plan to drop the prices 10-15 percent before the end of the year to speed up the inventory liquidation.