My wife was ranting about all of the foreclosures she sees in the paper, so I decided to do a little research on the situation.
First quarter sales data recently released by RealtyTrac shows that foreclosures accounted for 28 percent of all sales. This is the highest amount in a over a year.
According to RealtyTrac’s James J. Saccio: “At the first quarter foreclosure sales pace, it would take exactly three years to clear the current inventory of 1.9 million properties already on the banks’ books, or in foreclosure.”
The foreclosure rate for the USA is 1 in 119, or for every 119 properties, one is in foreclosure.
Here in Shasta County, according to RealtyTrac we are at 1 in 188, which is better than the national average.
Here are some areas that are in really bad shape from a foreclosure standpoint. As you will see, California has been hit pretty hard.
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If millions more distressed mortgages, i.e. the shadow inventory, enter foreclosure, it looks like things could get even worse.
It appears that short sales continue to climb because banks are finally concluding that it is in their interest to accept a short sale offer rather than go through the time, expense, and complications of foreclosing and then selling the property.
As bad as this distressed property situation is, there is a “shadow inventory” lurking beneath the surface that could really exacerbate things. The chart below shows where things stood just a couple of months ago.
Things will eventually turn around, but it appears it will take several years.
It doesn’t look to me like the stimulus package has done much to help this situation, or the economy in general.
Tags: Interesting
