Foreclosures Up. Home Prices Predicted to Fall Further
In August, InfoTube warned its readers about the New Wave of Foreclosures that would be pounding the market, further driving up inventory and eroding prices. Today, we learn that the Wall Street Journal agree’s with our accessment of the future market conditions for real estate.
Excerpt from the Wall Street Journal:
“The size of this shadow inventory is a source of concern and debate among real-estate agents and analysts who worry that when the supply is unleashed, it could interrupt the budding housing recovery and ignite a new wave of stress in the housing market . . . Analysts who track the shadow market have focused primarily on the gap between the number of seriously delinquent loans and the number of foreclosed homes for sale by mortgage companies. A loan is considered seriously delinquent, which typically means it is headed to foreclosure, if it is 90 days or more past due.
As of July, mortgage companies hadn’t begun the foreclosure process on 1.2 million loans that were at least 90 days past due, according to estimates prepared for The Wall Street Journal by LPS Applied Analytics, which collects and analyzes mortgage data. An additional 1.5 million seriously delinquent loans were somewhere in the foreclosure process, though the lender hadn’t yet acquired the property. The figures don’t include home-equity loans and other second mortgages.
Moreover, there were 217,000 loans in July where the borrower hadn’t made a payment in at least a year but the lender hadn’t begun the foreclosure process. In other words, 17% of home mortgages that are at least 12 months overdue aren’t in foreclosure, up from 8% a year earlier.”
What this means for Home Seller’s: Time is not your friend. The shadow of inventory of distressed property will continue to place downward pressure on home prices. Based upon our years of experience, we predict that home prices will fall an average of 7 percent in 2010.
If you need to sell your home, DO NOT chase the market down. Price your property aggressively, then market the home to as wide an audience as possible. To learn about the best way to reach the mass buying market, CLICK HERE.
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