Since I am in commercial real estate, my immediate response was "I have no idea."
As I was reading a few things tonight, I ran across some notes taken from the recent Value Investing Congress. One of the speakers at this year's Congress, Steve Dobson, CEO Amherst Securities, pointed to a few facts regarding the state of the housing industry:
• There are 8 million homes currently not paying their mortgage
• Once a borrower has missed 2 mortgage payments, foreclosure is all but inevitable
• The rate of recoveries is still declining
• The resolution process is grinding to a halt
• The amount of bank-owned real estate is falling, but that’s primarily because of a slowdown in the foreclosure process
• 29% to 50% of modified mortgages re-defaulted within six months
• 79% of all defaulted loans have a current loan to value (LTV) ratio above 120%
• Once a borrower has missed 2 mortgage payments, foreclosure is all but inevitable
• The rate of recoveries is still declining
• The resolution process is grinding to a halt
• The amount of bank-owned real estate is falling, but that’s primarily because of a slowdown in the foreclosure process
• 29% to 50% of modified mortgages re-defaulted within six months
• 79% of all defaulted loans have a current loan to value (LTV) ratio above 120%
So, have we hit bottom in the housing market? I will once again state "I have no idea."
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