She feels that our housing recovery does appear to be sustainable. That we've seen price gains in unusual times. Duke also believes that with the shrinking number of underwater homeowners we will see more sellers coming on the market, which will create more buyers of course, but supply and demand will continue to inch housing prices upward.
Her comments on any shadow inventory? "I do not believe that a flood of houses on the market from households that are currently underwater or from bank REO's are likely to materialize or to be sufficient to outpace growing demand." She does point out that the judicial foreclosure states will have a longer period of clearing them out. Again, California is a non-judicial state.
About 10 million mortgages are still underwater and as of the 3rd quarter of 2012, 1.4 million have risen out of negative equity, according to Core Logic's recent estimate. Good stuff here.
And, regarding investors? As prices continue to creep up, those would-be investors will continue to leave the market. But, at some point, may elect to start selling their holdings too.
She does state that for the housing recovery to really get in full swing the demand for housing among owner-occupiers must increase. And, she points out that it is these buyers that have the especially tight credit conditions.