While Washington DC was one of only two major metropolitan areas to see an increase in home prices in September, many analysts told the Washington Post that home prices “probably will not hit bottom until 2012 at the earliest.” The story published on November 28, 2011, cited a report from the Center for Responsible Lending that said that the foreclosure crisis has “yet to reach its halfway point” and that “there are no signs that the flood of home losses in America will recede anytime soon.”
“We do not think we’re going to make meaningful progress clearing out the shadow inventory until after the presidential election,” Mark Vitner, a senior economist at Wells Fargo, told the Post. “There’s going to have to be some sort of program that rallies people to action, some sort of incentive that brings these foreclosures to the market.”
Vitner added that getting the foreclosure backlog cleared will require a government initiative unlikely to come in an election year. He also told the Post that he expects the pace of home price declines to accelerate into 2012 before stabilizing, as long as the debt crisis in Europe or some other economic calamity does not cause a global recession. The nation’s political deadlock could also prolong the housing markets woes even longer, Vitner said.
Washington DC’s 1 percent increase in housing prices over the previous year was second only to Detroit, according to the Standard & Poor’s Case-Shiller home-price index. The data showed that the nation’s home prices decreased 0.6 percent in September from the prior month after posting slight gains over the summer and spring, and 3.6 percent from the same month a year ago.
While fewer homeowners have been falling behind on their mortgages, the Post said “millions of foreclosures remain in the pipeline, clogging court systems and local real estate markets across the country.” The persistent high unemployment has placed continued strain on homeowners needing foreclosure help and forced many more to consider a Chapter 13 or Chapter 7 bankruptcy process.
“When you look at where we are, we’ve really made no progress,” Mike Larson, a real estate analyst at Weiss Research, told the Post. “We’re back to where we were when the debt crisis happened.”
Law Firm of Kevin D. Judd – Washington DC bankruptcy attorney