Anyone care to speculate how much longer there will be lots of foreclosures on the market?

Question

I know the number of foreclosures varies widely by neighborhood, city, state, etc.

But this current time seems like an investors' dream, when many homes can still be bought for 20 cents on the dollar.

Anybody care to speculate about how much longer they think this abundance of foreclosures will last?

Or speculate about how many REO properties that banks, lenders, insurers, etc. are still withholding from the marketplace?

Account Closed · Answer

Interesting observations.

Strategy-wise, it's good to ponder these predictions.

Just seems weird to me from personal observations that:

Some areas I drive have pretty much 100% occupancy.

Some areas I drive have pretty much half the houses boarded up, yet very few of these are actually on the MLS.

One realtor told me that while some more well-to-do areas have recovered, other poorer areas have not since those were where many of the "no-income check, take-all-you-want" mortgages were handed out 8 or so years ago.

David Krulac · Answer

Depends where you are.  One county here had the highest number of foreclosures in their 200 year history in August , 2013.

All those houses that have been vacant for 1, 2, 3, 4 or more years and haven't been through foreclosure, because "we're keeping people in their homes" will come home to roost.

While in some areas the shadow inventory of foreclosed homes is dwindling in other areas its still growing.

Its not over under people can say, "Shadow inventory?  What's that?"

Account Closed · Answer

The ones you see boarded up and not on MLS the banks will bundle them up an sell to investors.

Jeff S. · Answer

I hear 2 years for my area.

Tiger M. · Answer

I dont know much, but I can tell you the NOD's in Vegas spiked last week. We ran 30-60 per day and last week we spiked to 235-275 per day. The highest day I have seen so far was 9-27-13 at 444. That will provide some product in 4-6 months.

Zach Schaar · Answer

I took a class on finding foreclosures and the instructor predicted 2013/14 to be huge as far as foreclosures because during the crash in 2008 people were set on these 5 yr mortgages that helped them out that are about to switch rates.

I have experience and acquaintances elsewhere that are saying the complete opposite.

Welcome to the world of real estate investing!

Chris Piper · Answer

There will be a huge inventory for a long time. Especially with the way our government is run, and the fact that banks always have "shadow inventory" that they hold back for no apparent reason. Plus, once the U.S. dollar loses it's place as the world standard currency and our credit rating drops and our interest rates go up on the debt our country owes, "hyper-inflation" will kick in. This will in turn cause everything to skyrocket in price, which means more people won't be able to afford things, and more houses will be foreclosed on. Then of course, we'll end up going back to the old standard of using gold and silver instead of paper currency. That'll be fun lugging your gold around to go shopping. LOL.

I heard that 1 in 8 people are in foreclosure right now. That means there are over 39,000,000 people in foreclosure right now. I think that is plenty of inventory for a while.

Brian Burke · Answer

Interesting question, Tanner.  In my observation, the "investors dream" of abundant opportunity was 2009 - 2011. Since then the volume in the areas I watch has declined steadily and has leveled off at a level that is low compared to the recent past but high relative to pre-crash levels.  I think volume will stay close to where it is now for a couple of years, then decline down to historical norms.  But what the heck do I know?  I've been buying at foreclosure auctions for 20+ years, but whatever I think is really nothing more than a guess.  No one really knows...and it will vary from one area to another.

Shane Johnson · Answer

Maybe its different in other areas, but in my local area, the foreclosures have slowed considerably even in the last year. The ones that are on market, they are asking full retail price for them.

Account Closed · Answer

There are no way to know how many REO proprieties the lenders are holding. I think I saw in the Las Vegas newspaper that the law has change or will change soon on home owners  will be foreclosure on faster and be out of their home much faster and no more free rent or can prolong the process.