Currently, foreclosures--and whether they will or will not continue apace--appear the most significant threat to the overall housing market.
When asked when the inventory overhang of foreclosed properties would be cleared, Big Builder survey respondents were mixed on when it would happen: 31.8% predicted 2013, 27.3% said it would happen in 2012, while 13.6% each predicted 2011, 2014, and 2015 and later.
The majority of respondents--68.2%--consider these foreclosed properties direct competition. Only 22.7% said they are not competition, and 9.1% said currently they are not direct competition but could be in the future.
When it comes to improperly prepared foreclosure paperwork, the majority of respondents--63.6%--said that would not prove to be a significant factor in the market for new homes. Only 18.2% of respondents felt that it would be a significant factor, and 18.2% said it might be a significant factor.
Respondents estimated the percentage of foreclosures in their markets that they believe may have been improperly foreclosed upon, with 40.9% estimating between 0% and 15%, 18.2% estimating 26% to 40%, 13.6% estimating none, 13.6% estimating between 16% and 25%, 9.1% estimating 86% to 100%, and 4.5% estimating 41% to 55%.
Survey respondents were split on whether they think a national moratorium on foreclosures would have a significant impact on new-home sales. Half of the respondents said no, and 45.5% said yes. The remaining 4.5% of respondents were still on the fence.
"There is no political will to sustain a moratorium long enough to have time to absorb the completed foreclosures. A moratorium would only add confusion and uncertainty about values thus keeping buyers on the sidelines," noted one respondent in the no camp.
While one respondent who said yes said, "It spreads the growing notion that short sales and foreclosures are a pain to come by and no longer the great deals they thought they were."