For about the last 2 years now, most media and their housing experts have been reporting good news on the housing front. The number of distressed properties was decreasing, the number of foreclosures was decreasing, prices were (and are) increasing. This seems like good news all around, right? Well, it certainly would be IF IT WERE ACTUALLY TRUE!
I’m sure it comes as no surprise to most of my readers that things are NOT always what they are reported to be:
1.) “If you like your health plan, you can keep it!”
2.) “Al Qaeda is on the run!”
3.) “The Benghazi embassy attack was in response to a youtube video. . .”
4.) “The average family’s health plan will be reduced by approximately $2500 per year. . .”
5.) “There were a few rogue agents in our Cincinnati IRS office who were targeting their political enemies. . .”
Etc, etc, ad infinitum.
Well, now comes the news that “Housing Bubble Fears May Not Be Unfounded” and that “Low Inventories Conceal Hidden Vacancies, Threat Looms. . .”
These two news stories from DS News show what I have been telling my clients for the last few years. Yes, things LOOK like they’re turning around, when
you read the news. By when you actually work in the default industry, you know that things are NOT what they seem to be. Here’s the bottom line, and it makes all the difference in the world:
Many millions of mortgage holders who have not payed their mortgages for some time, are simply not being foreclosed on. You heard me correctly. There are millions of people living in homes that they haven’t payed for, in some cases up to 3 to 4 years!
Why is this happening? Because it is now politically incorrect to foreclose on people who haven’t payed their mortgages. Mortgage lenders were directed in no uncertain terms to simply “STOP FORECLOSING ON PEOPLE! You’re making things worse!”
I have been saying for years that politicians will continue to kick this housing can down the road as long as they can, and hide the data from the American people, to try to create more consumer confidence. Well, the plan hasn’t worked out too well. The news reports that consumers are more confident, but do you know anyone who has confidence in the housing market? the economy? our military prowess? our health care system? I certainly don’t.
Sooner or later, all these people who are not paying their mortgages are going to be removed from their homes. Those homes will hit the market. Then there are all the homes that homeowners have simply abandoned, but have not been placed on the market for sale, but are held “off the books” by lenders. Those will have to come to the market eventually as well. That’s a double whammy. It HAS to happen. It’s just a matter of WHEN.
So, now you know why your house price has increase by 20% over the last 24 months. There are very few homes for sale, and this contributed to creating a strong demand.
If only you could see below the surface, you’d see all those other thousands of homes just sitting vacant, WAITING to go up for sale.