Housing is still suffering around the country, yet I believe recovery is underway. Why do I persist in saying that when the stats seem to point another way?
Two reasons really. First, when it comes to the question of distress real estate, the huge losses in value we’re seeing are partly accounted for by the declining condition of much of our nation’s housing stock.
One foreclosure I bought early in the housing bust had water damage, mold, sheetrock falling and warped walls in some places. A big part of the reason why I got the property on discount was because of the sad shape it was in.
So the numbers continue to be bad because the quality of housing stock continues to decline. Yet we are close to turning a corner. That’s the positive side of the housing picture.
What I’m not optimistic about is what’s going on in far-flung communities surrounding urban areas.
I believe that exurban counties, particularly areas where people commute 60 to 90 minutes to work, will continue to hurt moving forward. Part of it is demographics at play; the traditional nuclear family isn’t really where we’re at today and so what people seek for housing is different as a result.
To my mind, areas that are closer in to the urban cores will have the strongest recovery. Those that are way far out on the periphery will have a hard time for a good long while to come.
But the overall picture is on a trend path to improvement in most places. Today the stats don’t necessarily agree with me. But I think if you look back in a year or two, you’ll agree with me.