Greg Cowart on Zillow
Greg Cowart - Mortgage Broker or Lender at The Securus Group
Greg Cowart - Roseville Loan Guy

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What’s going on… This week in the world

roseville short sale foreclosureFinally, we’re seeing the balance tip in the financial press, with forecasts of a good—or at least tepid—selling season this spring.

But I’m sure you all know what it’s like when you’re driving a country road for the first time and it widens from nearly a one-lane experience of fright to a broad two-lane ‘highway’ that locals take at about 70 miles per hour. Then, suddenly and unexpectedly, the road goes from smooth concrete to asphalt to gravel, and you pull to the side, wondering what’s up ahead and whether you’ll survive it.

So it is with the economy today, at least where real estate is involved.

Many observers, whose words we find scattered through the financial press, are breaking out the champagne. Derek Kravitz and Alex Veiga, both of whom write prolifically for the Associated Press, recently had this to say, for example: “Five years after the U.S. housing bust sent sales and prices plunging, the spring home-buying season is pointing to a long-awaited recovery. Reduced prices, record-low mortgage rates, higher rents and an improving job market appears to be emboldening many would-be buyers. Open houses are drawing crowds. A wave of foreclosures is leading investors to grab bargain-priced homes.”

Which is all pretty great—smooth driving on a newly-cemented road—but the patches of unimproved gravel continue to intrude on our progress and make the driving feel dangerous.

The most recent completed sales computations, given the apparent improvement in related indicators—especially jobs—were disappointing. For sales completed in March, existing home sales fell off 2.6%, while new home sales were off by 7.1%. Even pending sales brought little solace, since newly-signed contracts dropped by 0.5% in February. (The index for March will be released tomorrow, on Thursday, April 26.)

There are a few mitigating circumstances. For example, there was a striking annual decline of 2.5% in the number of existing homes on the market. And the new home sales looked especially weak because of upward revisions to the number of sales in prior months—40,000 in February, 11,000 in January. Still, these don’t appear to be the sorts of dazzling numbers that would usher in a certain and sustainable recovery.

If I may climb aboard another metaphor, we should recall that the real estate market—like an ocean liner—takes a lot of time to turn around and often brings to mind the surprises that greeted the Titanic, the unsinkable ship, long ago. Our progress toward a truly sustainable market, therefore, is almost always attended by some fits and starts.

But this is not a bad thing for everyone. Certainly, there are those of us who have about run out of the ability to keep holding our breaths, waiting for the ‘All Clear’ signal. Actually, I suspect this economy will continue to generate concerns and uncertainties for many months to come, if not until the cows come home.

Meanwhile, the good part. There is still time, brothers and sisters. We don’t have to rush into the market with our checkbooks in our back pockets, pens at the ready, trying to grab a great deal and good financing before they’re gone. What we have here is a window of opportunity when nearly all the ingredients have come together—even the amount of time needed to engineer a solid transaction. This will surely pass, so the time to act on all of this is now.

And there’s something to watch very closely. Even major financial houses are beginning to see that investing time and energy into streamlining the ‘short sale’ process can potentially save them a lot of money over the cost of disposing of a property in a foreclosure. If they can make this work…if the market moves in favor of short sales (there were apparently more of them in January than foreclosure sales for the first time ever)… we may eliminate the heavy, dark clouds with which imminent foreclosures continue to threaten the real estate recovery.

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