The Bust Has Burst
As a follow-up to my previous article about the housing market and the mainstream media, I thought I’d post this. Just in from
The Wall Street Journal it seems they’re finally confident to announce what we’ve been watching here in Denver for the past six months.
From here on, housing is unlikely to drag the U.S. economy down further. It will instead reflect the strength or weakness of the overall economy: The more jobs, the more confident Americans are about keeping their jobs, the more they are willing to buy houses.
Though one thing in the article is not likely to affect the Denver market.
The biggest threat is a large shadow inventory of unsold homes, homes which owners won’t put on the market because they are underwater, homes that will be foreclosed eventually and homes owned by lenders. They have been trickling onto the market, slowed in part by government efforts to delay foreclosures; a flood could reverse the recent rise in prices.
In Denver, the ‘Shadow’ is but a phantom. We currently have such low inventory, especially in homes priced under $250k, and our pre-foreclosure stats are well below the national average. Combine this with the Colorado’s swift foreclosure process and the fact that we hit the slump ahead of the curve, allowing us to recover sooner, we are not counting on a glut of “Shadow Inventory”.