Naysayers claims U.S. housing market recovery could fizzle if rumored cache of foreclosed and delinquent homes is dumped on market as it starts to pick up; analysts disagree over likelihood of big price decline

LOS ANGELES , July 31, 2012 (Industry Intelligence Inc.) – The apparent U.S. housing recovery that is being reflected in homebuilding, home sales and house pricing data might not be as certain as some industry experts claim, according to those with a less optimistic viewpoint, reported National Public Radio (NPR) on July 31.



Some believe that a large inventory of foreclosed and delinquent homes is being withheld until market conditions improve, as they appear to be this year. During the first half of 2012, foreclosure activity increased in more than half of the major U.S. markets, RealtyTrac reported last week.



When these properties get dumped on the market, home prices will decline by at least 20%, probably in the next few quarters, according to Gary Shilling, a financial analyst with a typically bearish stand on housing, NPR reported.



Glenn Kelman, CEO of online brokerage Redfin, believes there is little chance of housing losing 10% to 20% and dragging “us back into the abyss” but acknowledges that there are problems with the market, telling NPR: “I don’t think anyone believes that we’re out of the woods yet.”



Economic circumstances determine household formation, and those are currently “very negative,” said Shilling, noting that about half of Americans cannot qualify for a mortgage, NPR reported.



The National Association of Realtors’ Chief Economist Lawrence Yun says that the housing market is beginning to turn the corner, but acknowledges the speed of the turnaround is uncertain.



An increased demand for houses has occurred across the U.S. as those who delayed buying a home until the market began to improve are now interested, he said, adding that this is a “self-reinforcing process” that boosts confidence about home buying.



Redfin's Kelman shares some of that confidence in the market and does not believe the reports that there is an enormous backlog of foreclosed homes, which he attributes to “every conspiracy theorist in real estate,” reported NPR.



The primary source of this article is National Public Radio (NPR), Washington, D.C., on July 31, 2012.

