I was in Fort Collins this morning for a presentation on the state of the real estate market by RE/MAX President and Founder Dave Liniger. Speaking before about 250 RE/MAX associates at the Fort Collins Hilton Hotel, Liniger shared his feelings about the tough times we’ve seen in the housing market, but also about the opportunities that lie ahead.
“The market we had this year is pretty much the market we’re going to have next year,” predicted Liniger, who says that the country will have at least three more years of higher than normal unemployment as we struggle to come out of the recession.
Liniger predicted that up to 50% of all real estate transactions in 2010 would involve distressed properties, either short sales or foreclosures.
In 2005, there were only about 400,000 foreclosures. In 2010, there are projected to be 1.9 million foreclosures across the United States, with Nevada, Arizona, California and Florida accounting for over one-half of the total.
Short sales continue to be the most frustrating segment of the market nationally, with just one in nine listed short sales closing successfully so far in 2009.
The vast majority of short sales end up as foreclosures, with banks often leaving tens of thousands of dollars on the table because of their unwillingness to accept short payoffs.
Like many agents, I caution my buyers about the perils of short sales. I have one offer written in May that is still in a holding pattern five months later, despite the fact my clients have twice “upped” their original offer and agreed to switch from FHA to conventional financing. There’s no reason (other than stupidity) that the bank is leaving this offer on the table as the foreclosure sale date looms.
“The banks have got to understand that they are damaging themselves, their balance sheets and an eventual recovery in the market with their stupid policies regarding short sales,” Liniger said. “If the banks can start to process this backlog of short sales, the sellers who are losing their homes today could be back in the market in as soon as two years. But when they foreclose, people see their credit damaged far more severely, and it takes them years longer to get back into the market.”
Tomorrow I’ll talk about the silver lining that Liniger sees starting in 2012 – and how today’s first-time buyers could be real beneficiaries of the wave that is coming.