Long, hard road to housing's recovery

A look at what recovery will look like in different segments

Much speculation exists on whether housing is on its way to a recovery or still searching for the bottom of the current downturn. What will a recovery look like and how hard will some markets need to fall before they can pick back up again?

These were questions the Inman News team had in mind when researching this special report on the housing recovery cycle. We asked industry veterans, analysts and experts what a recovery will look like in various market segments, including those for investors, bubble markets and the market for first-time buyers and mortgage loans.

Part 1, "Investors: from scapegoats to saviors," examines investors' role in housing's recovery. Real estate investors -- particularly those who are disapprovingly labeled as speculators -- are among a lineup of those pinned with blame in the frenzied boom that brought home prices and sales to record highs and set the stage for a deep freeze. Investors are sometimes demonized for driving up prices in a rising market, though the flip side is that they can play a key role in sparking the recovery of fallen and stalling housing markets.

Part 2, "What will it take for bubble markets to recover?," examines what needs to happen in those markets that increased the most during the boom before they can officially start to recover lost ground. In bubble-labeled markets like San Diego, industry professionals are carefully watching market metrics, such as sales numbers, the volume and stages of foreclosure properties, total for-sale inventory, and home-price trends to gauge whether the market is hitting the end of its dry spell.

Part 3, "Backing the recovery: Buyers need loans," looks at the crucial role of mortgages in the recovery. It's often said that "anyone who could fog a mirror" could get a mortgage through the private-label lenders who financed the housing boom by selling mortgage-backed securities to Wall Street investors. With that avenue of funding all but dried up, it's now largely up to the more conservative Fannie Mae, Freddie Mac, and mortgage insurers -- public and private – to decide who gets a loan, and on what terms.

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