Big Supply Of Foreclosures – For Sale
When homeowners default on their monthly mortgage payments lenders have no other choice but to foreclose their similarities. That is unless the homeowners find an different to settle their payments during the grace period provided. For several mitigating reasons, however, many homeowners are unable to meet these demands already during the grace period, which rule to them losing their similarities. The number of foreclosure similarities is growing, as one can see with the increasing amount of “For Sale” signs on homes every day.
There is a big supply of foreclosure homes, a three year inventory to be exact, which is said to be bringing down home prices rapidly. Realty Trac, an online marketer on foreclosed similarities, recently released a report saying that Las Vegas has seen numerous foreclosures. In fact nearly 53% of homes sold in the state of Nevada are in one stage of foreclosure or another.
In both Arizona and California 45% of sales conducted represent foreclosure. And during the first 3 months of 2011 nearly 28% of home sales all happened to represent foreclosure. Realty Trac spokesman Rick Sharga stated that this news is devastating for the economy. Worse than all this is that homes are being sold at really cheap discounts. This is especially true of bank-owned homes and so-called REOs that are following the procedures. According to a study done by Realty Trac, the REO average cost is about 35% less compared to comparable similarities. In other areas, the cheap discounts just got cheaper. REOs in the state of New York were at 53% in the first quarter. In Ohio, Wisconsin and Illinois, the REOs steeped down to nearly 50%.
Unfortunately for many, the rate of foreclosures is increasing each day and doing no good for the economy, the housing market or the country. The value of similarities is pulled down and this can be a disadvantage to neighborhoods. however there are certain people amidst this crisis, who with their knack and entrepreneurial spirit, are making a profit on these foreclosures.
Housing Markets Going Dirt Cheap
Also bringing down market prices are short sales. Short sales are when homes are sold at a lower price than what the borrower owes on his or her mortgage. Short sales take place at the discount rate of 9%.
The biggest discount on market prices seen anywhere came from Ohio at 41%, including both short sales and REOs. In the first quarter there were nearly 158,000 distressed similarities seen nationwide. This number is less than the number of distressed similarities seen about two years earlier, which stood at a enormous 350,000. Sharga said that currently there are 1.9 million similar similarities as this. The sales speed has slowed down, which method that it will take as long as three years to get by the inventory of distressed similarities.
Sharga also said that if you take the REOs aside, that alone will take nearly two years to clear the inventory. This can only happen if new foreclosures don’t make it into the system.