In a recently released survey done by the Wall Street Journal, participants believe that the US is currently in a recession and that the largest pull holding it down is the US property sector.
A 5.3% drop in property prices is likely in 2008 as measured by the Office of Federal Housing Enterprise Oversight. Additionally, it is believed that there will be a further decline in 2009 of 1.3%. This is likely to be the case due to the large inventory of houses on the market and the decrease in the amount of sales.
These economists believe that the bottoming out of the housing market will not hit until at least 2009, with some predicting it will take until 2010 to see improvements.
Other news showed that the housing market needs more help. In the month of February, the number of foreclosure filings moved up 60%. Additionally, bank seizures doubled. This happened as the number of adjustable mortgages rose and struggling property owners were unable to meet the adjustment.
One in every 557 US homes are in foreclosure. A further look shows that some US $460 billion worth of adjustable rate mortgages are scheduled to adjust in 2008 with another US $420 billion to rise by 2011.
According to Rick Sharga who is executive vice president of Realty Trac, a monitoring service of foreclosure properties, said, "We're in a vicious cycle. We've got depreciating property values and loans resetting at an outstanding volume just as banks are retrenching. Even people who want to buy a property now are having trouble getting a mortgage."
