Housing issues for 2013 © art1art – Fotolia.com

Nick Timiraos’ recent column in the Wall Street Journal offered up his own expert opinion on what we can expect to see in 2013, identifying the five most important housing issues that will affect consumers and real estate professionals alike:

1. Housing Prices Set To Inch Upwards

The WSJ article warns that much will depend on the success of the economy at large, but should this improve and the unemployment level decrease, many of the housing market’s biggest problems – such as foreclosures, the large number of homeowners underwater, and tough credit standards – will likely ease somewhat, paving the way for home prices to inch upwards even more.

2. Inventories to Grow

In order to meet the level of demand, Timiraos predicts that home builders will take production up another notch, whilst more homeowners may decide that the time is right to sell as housing prices continue their upward trend.

3. Rising Demand as Home Prices Rise

With home prices set to continue rising throughout 2013, the WSJ predicts that buyers will show increased urgency and make more efforts to close on deals sooner.

4. Lending Standards Remain Tight

Unfortunately for first time buyers, it’s unlikely that will see credit becoming any more accessible in the year ahead. The WSJ believes that new credit regulations will likely lock banks into their current “defensive posture” when it comes to lending – if anything, standards could become even more strict.

5. Shadow Inventory to Shrink

But only a little. The WSJ suggests that banks may look to speed up the process of foreclosure in those markets that already have large backlogs, but even so they are likely to remain cautious so that markets do not become inundated again.

We should note that all of this is nothing more than speculation of course, and while most economists are tentatively predicting an improvement in the economy overall, the housing market could quickly take a turn for the worse if these predictions don’t pan out. The WSJ reminds us that housing is still very fragile, and much depends on whether or not lawmakers can agree on a compromise to avert the “fiscal cliff”.

Experts Predict Real Estate Take Off In 2011

RealtyTrac, the California data supplier which specializes in foreclosures, predicts 2011 will be even worse for the industry. As if we have not had enough bad news already, only the most optimistic of industry experts venture to tell a better tale. These filings are the highest RealtyTrac has ever recorded, and Ohio has one foreclosure for every 47 homes. Some 20 thousand homes in the state were repossessed by the lender last year alone.

Though the broad reach of the foreclosure problem tends to be blamed on any number of other factors, the base cause today is because of job loss, wage cutbacks, and the logical range of inequalities that make it impossible for people to pay their bills. This is not about homeowners not budgeting or being sensible and sound in their home offices. It’s about people going broke basically. Cindy Flaherty, Director of home ownership for the Ohio Home Finance Agency had this to say about the situation in Ohio:

“We continue to see unemployment as the major driver of foreclosures in Ohio. Even when people get re-employed, the wages they are earning aren’t as good as prior.”

The unemployment rate in the state peaked at about 11 percent in March of 2010, and the ranks of those defaulting reflected this non-traditional situation where home repos is concerned. Homeowners requesting assistance in the state have basically rung the phones off the walls at agencies offering assistance too. No one takes into account the vast number of people clinging desperately to their mortgages – the great pool of unlisted people on the brink of repossession. People all over are, as usual, living “paycheck-to-paycheck” only now those paychecks cannot help make ends meet.

Five Million Homeowners Are Over Two Months Behind On Payments

The next time you read a “forward thinking” or even Alice In Wonderland forecast for the housing market in 2011, think of this. According to statistics there are 5 million more borrowers out there who are at least two months behind on their mortgage payments. Imagine having cut hours, even no job at all, and owing upwards of $2000 with no remedy in sight! RealtyTrac predicts there will be another 1.2 million homes repossesed in 2011, and this seems conservative.

If the economy does not get a major shot in the arm early in the year, it is possible that all 5 million of those borrowers can default. Only a small percentage would be invested in to recover if they were put on the stock market – think about it. The best advice is probably still a cautionary tale.

Original source, the Lancaster Eagle Gazette.