Grand Rapids, MI -- (SBWire) -- 12/31/2010 -- While financial advisor Dennis Tubbergen has been forecasting the housing market will not bottom out until 2012, he notes some people in the real estate industry have even gloomier forecasts.
Tubbergen, who is CEO of USA Wealth Management LLC, a federally registered investment advisory company, explains recent realty newsletters are not forecasting a housing recovery until after 2012. He quotes a survey published by Trulia.com and RealtyTrac Inc., in which only 4% of survey respondents say the market has already recovered, 58% predict an upswing after 2012, and a mere 10% think 2011 will be the key year for a turnaround.
“Based on the level of rate reset mortgages on which rates were actually resetting in 2010 and 2011, I continue to be of the opinion a bottom in the housing market cannot occur until 2012,” notes Tubbergen. “With real estate values still declining in most parts of the country and foreclosures still at near record levels, I continue to stand by that forecast.”
Rick Sharga of RealtyTrac was quoted in The Bryan Ellis Real Estate Letter as saying, “We don’t see a full market recovery until 2014.” Shargas also believes the first quarter of 2011 “could be even uglier than the fourth quarter of 2010” due to foreclosures being held up while lenders check their own lending practices after the ‘robo-signer’ scandals earlier this year.
According to Tubbergen, another area of concern for the housing industry is ‘shadow inventory,’ consisting of property that is in foreclosure, mortgages that are more than 90 days delinquent, and property that has been taken back by the lenders but is not yet listed as a foreclosure. The ‘shadow inventory’ is estimated to be some 2 million homes, bringing the total number of homes on the market to about 6 million.
“Some real estate analysts foresee another 3 years of price declines as the massive inventory of underwater and foreclosed homes is slowly sold off. We don’t need to look further than the basics of supply and demand to see why,” concludes Tubbergen. “Analysts estimate as many as 12 million more properties will be put up for sale over the next few years. If about 4 million homes are sold annually, it would take about 3 years to clear the backlog.”
For more information on Dennis Tubbergen’s views, visit http://www.dennistubbergen.com. To view the latest issue of Tubbergen’s Moving Markets? newsletter, go to http://www.moving-markets.com
The opinions expressed herein are those of the writer and not necessarily those of USA Wealth Management, LLC. This update may contain forward-looking statements, including, but not limited to, statements as to future events that involve various risks and uncertainties. Forward-looking statements involve known and unknown risks, uncertainties and other factors which may cause actual events or results to differ materially from those that were forecasted. Therefore, no forecast should be construed as a guarantee.
Investing in securities involves a risk of principal loss. Prior to making any investment decision, individuals should consult a professional to determine the risks, costs, benefits and fees associated with a particular investment. Information obtained from third party resources is believed to be reliable but the accuracy cannot be guaranteed.
Financial Advisor Still Forecasts Housing Market Bottom in 2012
Dennis Tubbergen has been predicting a 2012 bottom to the housing market: now other experts are joining in.