The Wall Street Journal reported that two studies, one conducted by John Burns Real Estate Consulting Group and Standard & Poor's Financial Services, both conclude that most efforts to modify loans will only delay, not prevent, foreclosure.

The John Burns study indicated that five million houses and condominiums  will go into foreclosure and will re-appear on the market over the next few years.  In addition, the 'Shadow Inventory'  (shadow inventory is the foreclosed homes that the banks have not placed on the market yet) represents at least a 10 month supply of homes and up to 27 month supply in certain markets (Orlando).  The shadow inventory is concentrated in Arizona, California, Florida and Nevada.

Despite  the slight tick upward in housing prices in the last two months, experts indicate that values will most likely be stable over the next few years.  This is dependent upon the economy continuing to  recover and interest rates remaining low.  If interest rates sharply increase or the economy worsens then those factors will have a negative impact on housing prices.

In Tucson, we have see the slight tick upward in December and January prices.  We are seeing multiple offers on properly priced foreclosures and short sales.   In the month of January, the Tucson MLS active listings did increase by 7.96%, but that is still down from the same time last year of 12.13%.  Right now homes are very affordable and it is a great time to buy a home.