What is the Forecast for 2011

Jan 30th, 2011 | By | Category: Market Update

2011 forecast | The Sahuarita COnnectionNobody knows what 2011 has in store for our housing market. Along with the rest of Arizona and the entire country, foreclosures and short sales continue to be a large part of our market. In September, some of the nation’s largest banks halted foreclosures due to the “robo-signing” scandal. It was alleged that they had signed thousands of foreclosure documents a month without reading them or verifying that they were accurate, a process known as “robo-signing.” The allegations caused lenders to impose temporary moratoriums on foreclosures while regulators and state prosecutors inspected paperwork and procedures. This of course slowed down the wave of foreclosures that has been threatening to flood markets across the country, but we have to keep in mind that they are still lurking in the shadows.

The foreclosure scandal may cause banks to be more willing to negotiate short sales. This coincides with new Treasury Department short sale policy changes that will become effective February 1. The changes include a requirement for loan servicers to determine a borrower’s Home Affordable Foreclosure Alternatives Program (HAFA) eligibility and issue or deny an approval within 30 days after receiving all documents. They will also be required to issue a response to a short sale contract within 30 days. The HAFA program will no longer require that a borrower’s payment exceed 31% of their gross income for eligibility and their move no longer has to be job related. These changes should enable faster short sale approval procedures and will make HAFA short sales viable for more sellers.

While we honestly don’t expect to see clear signs of recovery this year, we can hope that new short sale approval rules and processes and more closely scrutinized foreclosure proceedings will lead to smoother transactions. We have to hope for anything that will help to sell distressed properties and get them off the market so we can return to a healthy balance of regular resale and new construction homes! One thing is certain…the real estate market is more complicated than it has ever been and it is important to realize that expert advice is critical. Whether you are trying to decide whether you should buy or sell a house, make sure you are dealing with a real estate expert, not just someone who happens to have a real estate license.

As always, for more information call Mary Benavides at (520)248-2130, or email mbenavides@longrealty.com