For the real estate market, as with anything, there’s good news and there’s bad news.
The good news first: fewer homes are now “underwater”. This means that fewer homeowners owe more on their mortgage than their houses are worth, and this is, in itself, a positive thing.
The not so good news: fewer homes are underwater because more homes have gone under completely – that is, they’ve been foreclosed on. While a few homes here and there may have benefited from an increase in price – in Las Vegas and Washington, D.C., for example, prices are up just a teeny bit according to the latest Case-Shiller report – most properties simply haven’t appreciated, and homeowners unable to make payments have had to default.
Overall, though, most real estate investors and analysts believe that foreclosures are an essential part of finding the “true bottom” of the current housing crisis. There is, of course, a lot of wisdom in this attitude – the sooner things start changing hands, the sooner they’ll start changing.