I live in one of the more stable housing markets in the country. These days stable pretty much means that the value of housing in this area isn’t falling. The rate of foreclosures are higher than normal, but not close to the number other states are dealing with.

by Roger Wollstadt via Flickr

However, even in this area you can tell there are problems with housing in general. Staying flat isn’t growth, and planning to not lose money isn’t a winning proposition. What’s going on here is actually still going on in those housing markets across the country that are struggling mightily. What is it about housing that continues to make it fail? Let’s take a quick look.

1. Too many existing homes are on the market. You’d think this would make it a buyer’s market until you realize that the reason many homes are on the market is because the owners couldn’t afford to pay on them anymore and there’s not a large enough market of people looking for homes to take over.

2. Too many new homes are being built. Can you believe this one? There aren’t enough buyers for existing homes and yet home builders are still building new homes. And these new homes are priced right enough so that they’re very attractive when compared to an existing home that no one has taken care of for a long while. That plus even if someone’s already living in a home new homes just seem to add something that buyers like.

3. Home loans are tougher to get. We all knew that banks would tighten up their criteria but not as much as they have. If they can find any kind of blip on your credit report you’re done, no matter if you have a good credit rating otherwise or not. They’re looking at the type of job you have and determining if they feel it’s in a stable profession or not. They’re also starting to require higher downpayment amounts and closing costs amounts. They’re certainly not making it easy.

4. Too many foreclosures still coming. I’d thought the bell curve had been reached and the number of foreclosures would start coming down. Well, that actually happened, but when you keep adding more of them to the list percentages go out the window and pure numbers come into play. Some banks are trying to alter the market by keeping some of these homes off it, but I’m thinking this isn’t the best strategy around.

The housing industry needs a hero, an entity that will step to the plate, work with existing homeowners to help them through struggling times to stem the number of foreclosures, and then work with potential buyers to help them get into new or existing homes. Local banks and lenders do what they can, but it’s going to take one of the big boys to really get things moving. And with the trouble they’re in with trying to raise revenue, unfortunately it’s probably not coming any time soon.

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