at roughly $290,000, according to CAR’s historical data.
Even as the market improves and foreclosures decline, expect to see a share of distressed sales in the marketplace, Kleinhenz said, adding the foreclosure story will continue to play out more slowly than anyone expected.
The latest blame for this drawn-out recovery can be pinned on the most recent perceptions of a soft patch in the U.S. and global economies, and the roller coaster ride the financial market went in the last two weeks, which generated more uncertainty and added drag to the economy’s forward movement, Kleinhenz said.
“The gyrations in the financial markets will eventually subside, but we’ll still have a long-playing problem in the housing market with distressed properties that will be a significant part of the marketplace for the next couple of years,” he said.
Another question over housing and economic recovery was raised last week with the Fed announcement that it plans to keep its target for the overnight federal-funds rate at 0% to 0.25% for nearly another two years. That may help keep mortgage rates down for a while, but it signals the Fed itself has questions and concerns about the U.S. economic recovery.
“The Fed’s decision to hold rates steady will have the most direct impact on consumer loans that are based on the prime rate, which in turn is tied to the Fed funds rate,” Kleinhenz said. “These loan rates should not show much movement over the foreseeable future. Normally that would help consumer spending, but consumers seem to be sitting on their hands right now as they try to get a read on the direction of the economy and the impact of events around the globe on their own economic and financial situation. Consumer confidence remains weak, although not as weak as it was during the worst of the economic and financial crisis in 2008 and 2009.”
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