2010-2011 Real Estate Market Predictions | Real Estate Training

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2010-2011 Real Estate Market Predictions | Real Estate Training

Submitted by Tim Harris on November 20, 2009 – 12:55 pmNo Comment | Popularity: 2% [?]

Enough already!

When will the foreclosure mess finally level off…when will all of this be over so we can return to a ‘normal’ real estate market….when can we expect all of this real estate foreclosure contagion to end?

Lets ask an expert…Jay Brinkmann, Chief Economist of the MBA.

(NOTE: It is interesting to see the differences in predictions between the NAR and the MBA. The NARs recent forecast called for a partial market rebound in 2010…)

Mr. Brinkmann recently reported the results of the Mortgage Bankers Association’s (MBA) Q3 2009 National Delinquency Survey

Here are the leading points:

Prime loans are now the real problem. Fixed rate prime loans, and also FHA loans. “We are seeing the first hit on the weaker prime fixed borrowers.”

Delinquency rate includes loans in modification (something to remember – especially for the 90 day delinquent loans).

Unemployment rate to peak in Q1 or Q2 2010, and delinquencies to peak sometime after the unemployment rate peaks.

Brinkmann expects foreclosures to possibly peak in 2011. He expects unemployment to stay fairly high. Prime borrowers often have other ways to support their mortgage payments…savings, borrowing from friends and family, retirement accounts. For this reason, the spike in prime mortgage foreclosures will be later.A few graphs …

MBA Prime Delinquency and Foreclosure Rate

Click on graph for larger image in new window.
PRIME RATE FORECLOSURE RATE. Prime mortgages account for nearly 80% of all mortgages in the U.S.

Prime ARMs (adjustable rate mortgages) have a higher delinquency rate than Prime FRMs (fixed rate mortgages)

The third graph shows the delinquency and in foreclosure process rates for subprime loans.

IMPORTANT: Yesterday we posted a video that revealed more info on this topic…for example: 14.4% of ALL mortgage in the US are now IN foreclosure or seriously delinquent. Watch the video NOW.

40% of subprime loans are delinquent or in foreclosure.

Bottom line, we are at least 2-3 years away from a ‘peak’ in the foreclosure crisis. Until that happens….there won’t be any hope for any home value recovery. Realistically, homes in most areas of the country won’t be worth what they were at the peak of the bubble for 7-10 years.

Popularity: 2% [?]