Dennis Norman
By: Dennis Norman
Doing what all normal people do at 4:30 am on a Monday, I was scouring the Internet reading real estate news when I ran across an interesting article by Richard Stoyeck titled “Is Real Estate Coming Back Now?”
I’ll cut through the chase and give you Stoyeck’s answer to the question posed in the title of his story; “It will be in our opinion several years before we can get back to a vibrant real estate market.” If you have been reading this blog for a while then you know I have concerns about the housing market as well and don’t see any sort of quick recovery and in fact have questioned some of the recent optimistic headlines about the market.
Speaking of optimistic headlines, Stoyeck addresses this at the outset of his article by saying “a mere glance at the leading financial papers in America would have you believe that real estate has bottoms, and is already on the ascent again.” He also points out “The National Association of REALTORS reported in August of 2009 the following statement, Existing home sales rose in July for the fourth consecutive month.” “It seems outright bullish on the face of it, and that’s what the media wants you to believe. We say, not so fast. In our opinion, they are completely misleading the public. It’s intentional we think because they are biased,” says Stoyeck in his article.
A very interesting (as well as disturbing) fact that Stoyeck points out in his article is from “Inside Mortgage Finance” (a real estate industry trade publication) which reported that their latest survey shows 36 percent of all home sales involved “non-distressed” sales. Stoyeck then concludes that leaves the remaining 64 percent of home sales as “distressed” sales. He also points out that, reading further into the report, that of the 36 percent of home sales that were not “distress” sales, only 31 percent of them involved were “unforced or optional”. “When you come right down to it, perhaps about 10 percent of the sales involving real estate in the country for hte last several months was part of the normal sales process. That’s only one out of every ten house sales,” says Stoyeck.
I have not seen the report that Richard Stoyeck referred to in his article (I have requested a copy though from “Inside Mortgage Finance” and will publish the data if I obtain one) although I have no reason to dispute the facts he has quoted..they seem believable to me. Granted, here in St. Louis our market is more stable than coastal markets, so we may not be as affected by distressed sales as some areas but we are definitely affected though.
I guess the housing market recovery isn’t here just yet.
Leave a Reply
You must be logged in to post a comment.