Will the Foreclosure & Forbearance Moratoriums ending cause the Housing Market to crash?
There is a lot of social media traffic on the foreclosure and eviction moratoriums ending soon. They say that this will bring about a tsunami of foreclosures and housing prices will plummet. Thats not going to happen in the US and certainly isn’t happening in Phoenix, Arizona. Here is why…
In the Phoenix Metro Area we have 18 days of inventory. That is a VERY extreme Seller’s market.
We have only 637 properties in foreclosure right now in the Phoenix Metro Area and there is around a 1/2% of mortgages in forbearance. So there is probably 10,000 to 12,000 mortgages in forbearance here.
Let’s say they dumped all of those properties that are in forbearance and foreclosure on the market today. That would put us at 1.93 months of inventory in Phoenix, which is still an extreme sellers market. As we all know in an extreme Seller’s Market prices go up.
In the entire United States there is 2.4 months of inventory, 2.1M mortgages in Forbearance and 1.8M in Foreclosure. If those were all dumped on the market overnight there would be 4 months of inventory which is still a Seller’s Market teetering on Normal.
There are not enough foreclosures or mortgages in forbearance to cause the housing market to crash in Phoenix or the United States. The demand is too high and we’ve been in a housing shortage for years now.
You will see prices start to wane but they won’t go down. Instead of prices being up 23.6% from the previous year you’ll slowly see it slide to 8-12% IF we hit 4 months. IF it creeps even higher into a scary normal market, which is 5-7 months of inventory, prices still will go up around 4-6%.
If you want facts and not fear mongering lies then give us a follow…