Foreclosures / Short Sales – Current Market

Foreclosures and Short Sales have dominated recent real estate markets; but the tide is turning!

Since the financial community led the world over the financial brink in the period from 2005 through 2008, foreclosures short sales, abandonment of homes, auctions, and other signs of a distressed real estate market have been a part of the financial landscape in the USA.

Current analyses predict that the US is entering into the last of the foreclosure cycle now that the $25 Billion mortgage settlement has supposedly cleared the way to proceed with foreclosures following the robo signing fiasco. This next phase of the bank’s “service” to the American consumer may be minimized in that borrowers who are MORE underwater, say in the range of 20% to 40% negative equity will be favored in terms of short sale approvals because the settlement favors the banks financially in that scenario.

If this forecast is realized, then the inventory of potential short sale property offerings may be cleared more quickly than was demonstrated in the foreclosure debacle.

So what’s a good strategy to follow in this forthcoming market?

For Buyers, Sellers, and Investors it is a good time to be active in the market for an abundance of reasons:

  1. Interest rates are near historic lows hovering around the 4% range.
  2. Most inventories are at their lowest levels since the beginning of the recession.
  3. Distressed housing inventory is being rapidly depleted.
  4. Sellers are competing aggressively on price with distressed property offerings in the “normal” or retail market.
  5. Many sub-markets have been only minimally affected by the distressed sales property markets
  6. Professional agents have detailed hyper-local market information and it is sharable with our clients and customers.
  7. Housing affordability indexes are showing that today’s housing is at its most affordable level in decades.
  8. New household formations have been at record low levels since 2008 and there is substantial pent up demand for a “place of their own”.
  9. In spite of negative press, qualified buyers with limited savings can be approved for loans at affordable rates.
  10. It is still a “buyer’s market” in most locales with only a very few markets favoring sellers; though the tide is turning!

See these charts and related the article from the Washington Post and Bloomberg:


Case Shiller Indexes Jan 2012 381x1024 Foreclosures / Short Sales   Current Market

Case Shiller, heavily weighted with distressed sale points toward recovery


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