Asking recovery questions from another angle
It is no secret that there is a crisis in housing. Analysts vary on their opinion as to whether or not real estate has hit the bottom, and there is contentious disagreement about when a recovery will be in full swing.
Pending home sales (contracts signed) beat economists’ projections last week, perking up some analysts’ opinion on the market, but at the same time, National Association of Realtors Chief Economist Lawrence Yun is casting a hesitant and cautiously optimistic forecast for the coming years.
Lawsuits are flying in the banking world with homeowners suing for illegal foreclosures, as well as state and federal agencies probing lenders, with the Federal Housing Administration admonishing 240 lenders for violations. MERS is bowing out of facilitating foreclosures and judges are questioning the validity of thousands of foreclosures, throwing the entire process for a major loop with unpredictable consequences.
Regulations are shifting quickly and dramatically, with most industry insiders completely out of the loop, meanwhile, Americans believe troubled homeowners should sell rather than seek or receive federal assistance.
The scene is changing by the minute
With endless economic indicators pointing to a struggle in the housing market and courts changing their view on the foreclosure process, it is a confusing moment for the real estate sector.
Daniel Indiviglio, associate editor at The Atlantic asks, “are ugly houses preventing a home market recovery?”
The logic behind the Utopian question
The logic behind the question is based on Realtor Jeff Lichtenstein’s comment that “what Case-Shiller [home price index] fails to state is that there is a huge differentiation between ‘good inventory’ & ‘bad inventory'” and that clients never call and ask for a dreary home, rather they want a vibrant, beautiful home.
Indiviglio notes the disparity between ugly foreclosures and beautiful homes, opining that flipping the ugly homes for sale or lease would go a long way toward a recovery, noting “if the inventory is tackled through these strategies, then price aren’t going to suddenly soar, but they could begin to stabilize sooner.”
With so many factors at play, could something so simplistic get good mileage in bridging the gap between ugly foreclosures pulling down a market, and beautiful sale-ready listings?
Supporters and critics
Supporters of the theory that real estate flipping could help speed up a recovery could say that this disparity would do wonders for the market, while critics could say that by the time an ugly abandoned foreclosure hits the market, the neighborhood has already taken the hit on values, and the ripple effect ensues.
Perhaps it is a Utopian view, but improving the aesthetics of ugly listings could help, even if some believe flipping contributed to the fall of housing in the first place.
