Buyers have been on a feeding frenzy in some of the country’s hardest-hit markets, said Chris Pummer in MarketWatch.com. First-time homeowners and brave investors are “picking clean” bank-owned properties as soon as they hit the market in states such as Arizona, California, Florida, and Nevada. This trend not only “belies the doom-and-gloom evoked by recent reports of rising mortgage delinquency rates and foreclosure activity,” it may be a sign that the U.S. housing market has finally hit bottom. “You can’t discount how critical an upturn in those states will be, considering they account for 46 percent of foreclosures nationwide.” Stability in those markets will make banks throughout the country less “anxious” to dump their foreclosed properties—and that should help stabilize prices and interest rates across the board.
Yet few analysts are convinced that this flurry of activity indicates a lasting trend, said David Bogoslaw in BusinessWeek. “Recent gains in long-dated U.S. Treasury yields augur rising mortgage rates, while the likelihood of increasing foreclosures could further bloat the housing supply in the months ahead.” While it’s true that hard-hit areas have seen an increase in sales, many of the buyers are “bottom-fishers” looking to take advantage of fire-sale prices, says Robert Stevenson, an analyst at Fox-Pitt Kelton Cochran Caronia Waller in New York. A real recovery is probably still a couple of years away, adds real estate consultant John Burns. In fact, many of the “better” housing markets will likely see their own spike in foreclosures before the worst is over.
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