Reading an article about Ivy Zelman reveled some interesting facts about the current and future housing market. Ms Zelman calls the policies that are controlling the abysmal housing situation, like the Home Affordable Modification Program, as simply delaying the “onslaught”. A shadow inventory or homes that will go into foreclosure but were delayed because of Washington’s dictate are nothing but ‘pigs with lipstick’, to paraphrase Ms Zelman. The shadow inventory pushes the supply of homes from a national average around 8% to something above 13%.

The distressed properties in the $150,000 and less range are being bought up by investors 67% of the time. This is beneficial to the market: it reduces inventory and are good deals for investors.

The rental yields are also very attractive, 6-12%, which will keep investors in the market and inventory down.

The most amazing, but disconcerting statistic is that homes valued at $400,000 or more are not moving at all – a 45 month supply. The ultimate buyers market, if you have cash! The strict guidelines for mortgages on this segment of the housing supply is having a negative effect.

It looks like the housing recovery will muddle along for quite some time, but it will provide investors plenty of opportunity.
Posted in Foreclosure, Investment