What’s so scary about foreclosures?
“U.S. Foreclosure Market Trends”
Does that sound like something you would like to learn about on a Friday morning? On a conference call, no less? Just listening, nothing to look at, just depressing numbers lining up in your ear, tormenting you with the bleak statistics of what is going on in American Real Estate?
Me either. That’s not even a good title.
On the other hand, would you like your Realtor® to be listening to that conference call?
I thought so. So did Roy, who spent the morning listening to Rick Sharga, the same guy who briefs little groups like the Senate Banking Committee, give a conference call with RealtyTrac.
The hard truth:
- In 2005 (a “normal” year), the number of foreclosures averaged about 550,000 per year…….they’re currently running at an average of 300,000 per month.
- For the past 52 months, the year-over-year foreclosure rate has consistently increased, setting a repossession record in the 2nd quarter of 2010. Another record is expected to be set for the quarter in September 2010.
- Currently, approximately 900,000 REO (Real Estate Owned – as in, owned by the Bank) properties are on the books of financial institutions, with only about 30% having actually been placed on the market.
A yearly forecast:
- RealtyTrac expects the foreclosure rate to peak in 2011.
- During the year 2012, it is expected that the repossession rate will gradually get better.
- By 2013, the repossession rate should begin to approach something more normal.
- 2014 is the earliest we should expect to see any appreciation in home values.
- On a market-by-market basis, we could see home values decline by another 3-5% but this is not across the board. It will be on a market-by-market basis.
- Currently there is a shadow inventory to come on the market that will be released in measured amounts over the next 3-4 years of REO properties.
- Currently foreclosure offerings result in a 26-27% savings to buyers over conventional offerings by private sellers.
So what we are telling you is that yes, people are losing their homes more than ever before, and yes, things are going to get worse. But make sure you mark the year 2014 on the calendar, because the market will get better. It might be three years away, but at least the experts are saying that we will see home values begin to rise! That’s a silver lining, people!
But, if you still need a little pick-me-up….and who doesn’t after a long work week, I will leave you with this example of what goes on around here after dark…..be warned, it’s way more frightening than a foreclosure!
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