While traveling around the country in the last 2 months, I've heard so many different opinions about what is going on in the REO market. I have been to Dallas, Florida, Denver and Orange County and, trust me, everyone has an opinion!
Here are some interesting factoids:
“During the peak of the housing boom, less than 3% of home sales in California were REO transactions. Now, REO sales account for more than 52% of all sales in the state.” LPS Applied Analytics
“Foreclosure filings have eased slightly…but remain significantly higher than year-ago levels despite lower levels of real-estate owned (REO) properties. Nevada posted the highest foreclosure rate…and California trailed in a close third with one in every 144 units receiving a filing.” RealtyTrac
“When we do a lock out with the Sheriffs, now they go in with their guns out. We stay at the curb until they have completely checked the property. Two Sheriffs were recently shot in our area.” Local agent
“Commercial defaults are exploding. The value of distressed commercial properties has more than doubled in the first quarter of 2009, climbing from $46 billion to $97 billion…everyone is in their lifeboats. Total defaults could hit $200 billion in the next six months.” Ray McLaine
When is the shadow inventory going to hit the market—maybe never? Then again maybe in January.
Economists can’t agree on when this heavy REO market will be over. I’ve heard 2 years to 7 years and everything in-between. Most seem to agree that the government has delayed the process. Until the foreclosed and distressed properties can be liquidated, there will not be any true real estate recovery.
At most events the biggest buzz words were “short sales” “eviction delays or stays” and the banks failure to successfully negotiate these transactions.