When will the Market get 'better?'

Perspectives on a 'better' 

real estate market

When the real estate market improves has a lot to do with your perspective on the market, said Alex Perriello, president and CEO for Realogy Franchise Group. "Oftentimes I'm asked, 'When's the market going to get better?' It all depends on how you define the word 'better,' "If you define 'better' as 'When will I not have to deal with foreclosures, short sales, underwater homes, people with damaged credit, (problems with appraisals), tough lending standards?' the answer to that is 'No time soon' -- at least for the next two or three years, and in some places, depending on where you live, it could be much longer than that."

Diana Olick, real estate correspondent for CNBC blog at CNBC.com, who also participated in the panel session, said she doesn't expect a sharp rebound once the real estate recovery takes hold.

She said she expects that at some point in the middle of 2012 "we are going to see the price stabilization we need, then people are going to start to buy," adding, "I don't think we're going to see a great surge up ... we're going to see pockets of strength in certain markets."

The factors that she expects will keep the real estate market subdued: deflated consumer confidence, and the need to work through the stream of distressed properties.

Olick and Perriello agreed that reduction of principal for distressed homeowners has proven one of the most effective deterrents to foreclosure, and panelists generally agreed that the foreclosure process is taking far too long to run its course in many areas.

Olick said that the problem is that many homeowners appear to be "staying in their houses and gaming the system," living in their homes without paying the mortgage for several years, in some cases. "That's a big problem right now," Olick said.

She also said she believes that investors will be at the forefront of the real estate recovery.

While investors -- namely house-flipping speculators -- have been vilified for their role in driving up prices during the boom years, Olick said that "it is the private equity, the institutional markets, coming in and taking the distress out of the markets that we need right now. That's going to be the strength in the market this year, and that's a good thing."

Margaret Kelly, CEO for Re/Max LLC and a fellow panelist, said she believes the short-sale process must be improved and expedited, and appraisal reform is also needed. "Appraisals have been a nightmare." 

"If you think about the last three or four years, it's been a mixed bag, on the good side we've had government agencies buying up mortgage-backed securities, which has provided capital to the market, which has been a good thing -- it's kept interest rates low."

The series of federal homebuyer tax credit programs have also provided some welcome relief, he said.

"On the negative side, you've got legislation that's been passed -- like Dodd-Frank would be a perfect example -- that's now in the hands of the regulators. And if the regulators have their way it's going to be, I believe, very damaging for housing and it's going to make mortgage lending even more difficult for the homebuyer to get a loan and it's going to be more expensive, people are concerned, there's doubt in the market, and whenever there's uncertainty and doubt in the market people sit back and say, 'I think I'll wait,' " he said.

Housing recovery may not bring a sales spike

By Glenn Roberts Jr.
Inman News®NEW YORK --