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It’s Getting Wetter All The Time

Yesterday, a few people remarked that they "heard housing was getting better”.  I replied that while yes, I did have one contract signed this week, I do not think my solitary deal caused the nation’s numbers to look better.  And besides, I advised, the government issued numbers are all wet, especially those from the Federal Housing Finance Authority, which is the umbrella under which the already soaking wet Freddie Mac and Fannie Mae seek shelter.  Sales came from a large jump in foreclosures as well as homes sold after additional 10-20% price cuts.  “But at least they sold, right?” was the follow-up question.

Leaving aside that not all sales are equal (there will be penniless and/or homeless people as a result of many of these sales), I respond that a modest increase in sales is far from enough if the federal numbers don’t let you know where the overall housing market stands.  There’s about a year’s worth of inventory on the market, and a whole lot more teetering on the narrow ledge separating past due and sold at foreclosure.  In fact, the federally backed loans have over 1 million borrowers who are 60 days past due for a payment, a number which increases by about 75,000 each month.  I have read that under the stimulus package about 10,000 loans per month will be restructured, leaving economists to calculate there will be a 10 year backlog of homeowners needing help.  As we all know, lenders won’t wait that long without payments being made, and there may not be enough sandbags filled with 4% mortgages to snap up the flooding waves of inventory.

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Have a terrific last weekend of March; this month cannot end too soon for me!  My latest Huffington Post entry is on-line:  "Party Likes It's 2009http://www.huffingtonpost.com/lita-smithmines/party-likes-its-2009_b_177686.html

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