Will A Foreclosure Wave Crash The Housing Market?

a wave of foreclosures that will be hitting the fiery hot housing market

Over the next three to six months, there will be a lot of people reporting on, speculating about, and even heralding a wave of foreclosures that will be hitting the fiery hot housing market.

Many claim the foreclosure tsunami will be the cause of a new housing bubble, yet I believe they are a little short-sighted and I have some evidence that suggests this will not be so.

Currently, the market for distressed properties is tiny, as you can see by the few listings on the market today.

Distressed Properties For Sale In Tallahassee

16 Properties
Page 1 of 2

Foreclosure Wave Exposed

Foreclosures And A New Housing Bubble

The Federal Government placed a moratorium on Foreclosures during the beginning stages of the COVID pandemic that (kind of) came to an end at the end of September. I say “kind of” because there are many lenders that extended their own version of the moratorium through the end of the year.

On top of that, there were millions of homeowners who took a voluntary forbearance period where they were allowed to stop making mortgage payments and agreed to have the accumulated interest pushed to the end of the loan period.

So in a nutshell, there are several million loans in the US that fall into one of these two categories, and many have said when these homes hit the market, we’re going to see a repeat of the housing bubble. Of course, they made/make these claims without an understanding of the overall market.

Get Our Free Market Update

Weekly Special real estate report covers the Tallahassee real estate market

Other buyers, sellers, lenders, and real estate agents have this critical information, and now you can too!

Get immediate access to our most recent newsletter.

Let nearly 30 years of experience work for you with charts, graphs, and analysis of the Tallahassee housing market.

Each Monday morning we send out a simple, one-page report that provides a snapshot of the Tallahassee housing market. It only takes 2 minutes to read, but it gives you better market intelligence than most real estate agents possess. Just tell us where to send it below!

Equity In The Housing Market

What these incorrect reports fail to grasp is that home values are rising due to low supply, so most of these homes have appreciated 20% or more since the beginning of the pandemic.

most of these homes have appreciated 20% or more since the  beginning of the pandemic

In the graph above, we compare home values versus foreclosures for the past thirty-one years. Home values are plotted in green, while the number of foreclosures sold is plotted in red.

In 2008, the market was oversupplied with homes, and values were falling. The millions of foreclosures that entered the market after 2008 only added to the glut of supply and furthered depreciating values. Contrast that will today, where the lack of homebuilding has created a void in the supply side of the market, causing home values to rise.

The current number of potential foreclosures will (might) come with most of these properties having far more equity than debt, so the homes can be sold on the open market allowing the owners to satisfy the debt on the properties.

When you combine low supply with high equity and even moderate demand, you have all the ingredients you need to see home values continue higher, regardless of the foreclosures that will arrive.

Could a new housing bubble form? Yes. It would require mortgage interest rates to soar higher, killing demand, homebuilders escalating new construction, and then the foreclosures hitting the market causing an oversupply.

Will a new housing bubble form? Nobody knows for sure, but the pressure on the Fed to keep rates relatively low to help the recovering economy thrive makes it far less likely. People are getting their jobs back, lenders are motivated to rework loans for those that are delinquent, so right now, the odds are in favor of no new bubble.

If a new bubble were to form, we will see it coming. Subscribe to our newsletter and you'll get regular updates on movement in the housing market. Simply put your name and email address in the form above, and then confirm (by email) that you would like to receive our newsletter. It comes every Monday morning and you can unsubscribe any time that you like.

How Fragile Is The Housing Market?

US Homeownership Rate Crash
Homeownership has been high since World War II, but there is a generational shift in the US housing market that is occurring with two key trends that will soon destroy home affordability and then homeownership in the US.
Foreclosure Wave? The End Of The Mortgage Moratorium And Forbearance
Many claim a foreclosure tsunami will be the cause of a new housing bubble, yet I believe they are a little short-sighted and I have some evidence that shows this is just not going to happen.
How Often Do Home Prices Fall?
Are home prices falling? Will house prices fall soon? Home prices are soaring, buyers are having to pay above most sellers' asking prices, and the housing market feels just like a feeding frenzy during Shark Week on the Discovery Channel.
Signs Of A Housing Market Collapse?
When we study the US median market rent, we see signs that paint a clear picture of the future of home prices and home values.
Home Affordability Forecast
Real estate prices are moving higher (faster). This is a real estate forecast you need to see. Many have been misinformed about home prices and the housing market and must watch and internalize the message from this video.
Housing Shortage Confirmed: Median Market Rent Explosion
The lack of home builder production has home prices and home values soaring, now look at what's happening to rents too!
What Do Low Mortgage Interest Rates Really Mean?
Every article or video about mortgage interest rates conveys that rates are low, but do you really know what it means?
Home Affordability Forecast and Housing Report 2021 Q1
A look at how home affordability is likely to change over the next twenty years. I produced the forecast by using data from the past and applying it forward, including inflation, home prices, home values, and mortgage interest rates. If you have a stake in the housing market, you don't want to miss this forecast
Here's Where Home Affordability Is Heading
There is a generational shift occurring in the housing market that I reveal in this video. I’m talking about how buying a home over the next twenty years will be unlike what previous generations saw since the early 1980s.
The Truth About The Housing Bubble Of 2021
Will there be a housing bubble in 2021? - If you look at the most active real estate videos on YouTube, you'll find that the forecast for the next real estate bubble is very popular. Is there a housing crisis and will there be a housing crash in 2021? Or is it just sensationalism that drives people to watch these so-called reports? This video exposes real evidence and I will give you data that tells you everything you need to know about a housing bubble in 2021.
Real Estate Crash In 2021?
Are you worried about a real estate crash in 2021? For this to happen, we’ll first start to see a rise in the supply of homes for sale, so today’s housing market 2020 report is focused on the supply side of housing market conditions. In normal years, October is about the slowest month for new contracts being written and new listings entering the market. But this is 2020. This is not normal. You should know that I do provide a fair warning, for all home sellers, near the end of this video.

Your Local Expert In Tallahassee

When moving to, in, or from Tallahassee, you will fare better if you work with a local expert. We are here to help. If you have further questions on the Tallahassee real estate market, you can leave a comment below, give us a call at (850) 366-8917, or drop us a note and we'll give you the local information needed to ensure a successful, smooth transaction.

As a local born and raised in Tallahassee with a focus on customer service, I promise you'll find great success when working with Joe Manausa Real Estate, just as have our past customers. You can read thousands of their reviews reported on Google, Facebook and Zillow right here: Real Estate Agent Reviews Tallahassee.

The digital marketing guide for small businessesHave you heard about my new book "The Business of Getting Business?" It's a comprehensive guide for small businesses to help them make the move to digital. For those of us who want to survive and thrive in a world where large corporations are taking over, it is a must-read. It's also the perfect guide for how to sell a home in the digital age. You can find The Business Of Getting Business by clicking on any of the trusted retailers below.

Real Estate Agent reveals in Tallahassee, Florida

Think all REALTORS are alike?

Read what people are saying about working with Joe Manausa Real Estate! You can see thousands of real customer reviews reported on Google, Facebook and Zillow at this link: CLICK HERE FOR REAL ESTATE AGENT REVIEWS.

Post a Comment

(850) 366-8917