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June 29--How do you feel?
I'm not inquiring about your health, well not in this case, at least.
The question is about the economy, specifically as it relates to housing, because the MacArthur Foundation recently released a survey that found seven in 10 Americans "believe we are still in the middle of the crisis or the worst is yet to come."
Just when you think it's safe to dream, someone reminds you how quickly it can turn into a nightmare.
I spent the years 2007 to 2012 writing about how record foreclosure levels -- 2.9 million properties in 2010 compared with 500,000 in the real estate boom year of 2005 -- affected area homeowners.
No matter how much I wrote, the stories kept coming, to a point when, in 2009, a reader begged me to "start writing about hammering nails again."
In this region, the data show that the decline in home prices that began in August 2007 scraped the bottom in 2012. But up is a long way to go, and prices may never get that high again.
Today, the inventory of homes for sale remains low. Multiple bids simply get sale prices to list price or a bit above, and even those asking prices are nowhere near what would be realized in normal -- as opposed to boom -- times.
"Where are they going to go?" asked Jane Wellbrock, of Weichert Realtors'Chadds Ford office, when I sought a reason for the dearth of houses for sale.
If someone is planning to downsize, that's one thing, but it's tougher, with trillions of dollars of lost equity, for many people to move up to bigger houses.
And first-time buyers?
Veteran builder Frank McKee forwarded me a Builder magazine article by John McManus that offered several reasons why millennials -- the target first-time audience -- aren't buying houses. Among them: credit constraints; student debt; job recovery; down payments, and being "gun-shy on homeownership thanks to earlier housing meltdown."
Bankruptcy lawyer Stephen Dunne of Philadelphia, who focuses much of his practice on extricating college graduates from debt crises, quips that he rents because he already has two mortgages: student loans.
Even when first-timers get their ducks in a row, clouds get in their way.
Michael Copley, executive vice president, retail lending, for TD Bank in Cherry Hill, said private mortgage insurance -- covering the difference between the down payment and what the lender requires -- is being cited by more buyers and prospective ones as a barrier to ownership.
A TD survey of 2,000 people who have bought in the last 10 years found that millennials requiring PMI felt "most impacted in home-purchasing decisions, such as delaying the purchase of a home or purchasing a smaller home," Copley said.
PMI, costing an average of $100 a month, can become a significant expense for many borrowers before they reach 20 percent equity in their properties, he said.
Federal Housing Administration loans now require PMI for the life of the loan, which considerably increases the total cost for borrowers who cannot make a 20 percent down payment, he added.
Though economists and experts say the crisis is behind us, the public is not feeling relieved, the MacArthur Foundation said in a report on its study.
"Concern and insecurity about the ability of middle-class Americans to maintain their footing and for people to rise up into the middle class is a central theme in America today," said Geoffrey Garin, of Hart Research Associates, which conducted the study.
"This research," he said, "shows that housing is front and center in these concerns."
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