Foreclosures Hit A Five Year Low

Throughout this year we have watched the signs of a market recovery begin to happen. The Federal Reserve has pushed mortgage rates to all time lows, buyers are active in the market, homes are selling faster and prices are beginning to stabilize. In a report released last Thursday by Realty Trac we see even more good news. The online foreclosure website reports that foreclosure filings were more than 16% down from last year. That is a large percentage and can have a huge impact on the market. Numerous factors have contributed to the improvement. Many of the programs and new guidelines that the government and the banks have put in to play to assist homeowners are getting firmly rooted. Many banks are aggressively working to get short sales approved and to assist owners with refinancing at these new lower rates when possible. The government’s Home Affordable Modification Program has helped more than a million borrowers obtain more affordable mortgages allowing them to avoid a foreclosure situation according to an article on CNN Money.

As the pace of foreclosure filings slows down it will begin to be harder to find deeply discounted deals on the market. This will push the market more towards stability as prices are forced to level out. Barclays Capital recently reported that home prices could be back to peak levels as soon as 2015. Rick Palacios, senior analyst with John Burns Real Estate Consulting said “We think the recovery is for real this time around. If you look across the U.S. economy right now, there are only a handful of industries looking at 20-30% growth over the next 4-5 years and housing is one of those.”

The housing market deeply touches the overall economy and we believe an improving market will help the entire economy to improve. Roger Altman, chairman of Evercore Partners and former Deputy Treasury Secretary, said in an article for Financial Times “That turn in the housing market is occurring now and it should become a boom by 2015. It will be powerful enough to lift the entire U.S. economy.” Altman expects housing to add 4 million jobs to the economy over the next five years.

Though we are all excited to see the market improve it does mean that the days of hugely discounted properties are coming to their end. There are still plenty of very well priced homes available on the market and now is the time to if you are thinking of an investment or second home purchase in the Smoky Mountains to take advantage of still low prices.

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