Bulk Sales ‘Quickest Solution’ For Home Overhang, Amherst’s Goodman Says

Housing prices in the U.S. will fall a further 5 percent in the next year before the bottom as the government plans to sell foreclosed properties to investors, according to Laurie Goodman of Amherst Securities Group LP.

“Policy makers have finally gotten the prescription right,” Goodman, New York-based senior managing director of the firm, said today in a Bloomberg Television “Surveillance Midday” interview with Tom Keene. The “quickest solution” to resolving an overhang of foreclosed properties that’s restraining housing’s recovery is through bulk sales of properties held by government-supported mortgage financiers, she said.

The Federal Housing Finance Agency said this week it will send detailed information to investors who qualify to participate in a pilot program to turn about 2,500 foreclosed homes into rentals. President Barack Obama’s administration also proposed this month to expand loan modifications for delinquent homeowners to include some principal reductions through the Home Affordable Modification Program.

“Principal reductions have been the most successful kind of modification,” said Goodman.

The S&P/Case-Shiller index of property values in 20 cities fell 4 percent in December from a year earlier and values are down 34 percent from a July 2006 peak.

To contact the reporter on this story: Christine Harvey in New York at charvey32@bloomberg.net

To contact the editor responsible for this story: Pierre Paulden at ppaulden@bloomberg.net

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Feb. 29 (Bloomberg) -- Laurie Goodman, an analyst at Amherst Securities Group LP, talks about the outlook for the U.S. housing market. Goodman also discusses government efforts to stimulate the market including bulk sales. She speaks with Tom Keene on Bloomberg Television's "Surveillance Midday." (Source: Bloomberg)