The term “revulsion” has been used when describing the current condition of the Fort Collins housing market. This term was introduced to us by Nishu Sood, director of Wall Street’s Deutsche Bank Securities. According to Sood, revulsion is the final phase of the “Housing Bubble” cycle before recovery begins in that region’s housing market.
If asked about the Fort Collins real estate market back in 2010, his comments would have been full of negative assessments and predictions. But, as of December, 2011, he has a much more positive outlook about the region’s market. He sees a recovery coming that looks much more promising than that of many other parts of the country.
Sood describes the cycles of the housing bubble as follows:
- 1990′s – Major changes were made in the mortgage business, along with technological upgrades. Both made it easier for homebuyers to obtain mortgage loans.
- 2002 – The prices of homes began to rise. But, most of us didn’t seem to notice because were too busy concentrating on the “dot.com” stocks.
- 2004 – Everyone is in high spirits of euphoria about the housing market and home ownership. It was during this phase where housing prices soared.
- 2005-2006 – This is the phase where the housing market exploded, so to speak. It has been said that during this time period, anyone could qualify for a mortgage loan to buy a home.
- 2008-2008 – This is when everything reversed itself. The housing market began to crumble. Everyone expected it to happen. But, there was nothing anyone could do to prepare for the financial disaster that would soon rock our nation.
- 2008-2009 – The financial disaster is now a crisis. At this point, no immediate recovery is in sight.
- Currently – Revulsion. Many people no longer trust the housing market, and are very reluctant to get mortgage loans to purchase homes.
- Hope for the Future – Recovery. Many housing experts believe that recovery is the next phase and it will be starting soon. They don’t see a full recovery happening in 2012. But, they do believe that 2012 will bring about changes that can start the recovery process in the US housing market. They all agree that the recovery should be in full effect by the year 2014.
The United States housing bubble is, in essence, an economic bubble that has affected almost every part of our country’s housing market. In 2006, housing prices peaked, then started a decline later that same year that has not quite hit bottom yet. At the end of 2008, Case-Shiller home price index made reports of the largest prices drops in its history.
The increasing amount of foreclosures in the United States was the leading cause of the “foreclosure crisis” in 2008. This mostly affected the ARM, subprime, collateralized debt obligation (CDO) and hedge fund housing markets. In October of 2007, the US Secretary of the Treasury called the bursting housing bubble crisis, “the most significant risk to our economy.” As of 2011, we have still not fully recovered.
Article written by Allison Klein: You can learn more about Allison by visiting her neighborhood pages where you can search for Hearthfire homes for sale and Huntington homes for sale in Fort Collins.
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