From Reuters (hat tip Juice):
The housing market will remain depressed, with record high foreclosure levels, rising mortgage rates and a glut of distressed properties dampening the market for years to come, industry experts predicted on Tuesday.
“We don’t see a full market recovery until 2014,” said Rick Sharga of RealtyTrac, a foreclosure marketplace and tracking service. He said that he expected more than 3 million homeowners to receive foreclosure notices in 2010, with more than 1 million homes being seized by banks before the end of the year.
Both of those numbers are records and expected to go even higher, as $300 billion in adjustable rate loans reset and foreclosures that had been held up by the robo-signing scandal work through the process. That should make the first quarter of 2011 even uglier than the fourth quarter of 2010, he said.
Mortgage rates will start to rise in 2011, further dampening demand and limiting affordability, said Pete Flint, chief executive of Trulia.com, a real estate search and research website. “Nationally, prices will decline between 5 percent and 7 percent, with most of the decline occurring in the first half of next year,” he said.
The two firms released a survey showing a marked deterioration in consumers’ views of the housing market, too. Almost half — 48 percent — said they’d consider walking away from their homes and their mortgages if they were underwater on their loans. That’s up almost 20 percent from when the same question was asked in May. “If that continues it would be an epidemic of strategic defaults,” said Flint.
Roughly 1 in 5 consumers said they expect it to be 2015 before there is a recovery in housing, according to the survey, conducted in November by Harris Interactive. Most respondents said they think recovery will come in 2012 or 2013. Would-be buyers suggested they wouldn’t really get serious about purchasing a home for another two years.
Sharga sees a big glut in distressed properties hitting the market. There are about 5 million loans that are at least 60 days overdue, he said. In the next 12 to 15 months, another $300 billion in adjustable rate loans will reset, and “they will default at pretty high levels.”