RealtyTrac previously projected that close to 1.2 million properties would be foreclosed in 2011, based on foreclosure start activity in 2010. But REO activity through November puts the nation on pace to reach only about 800,000 properties foreclosed for the year. See our year-end report for the final number
So what happened to the 400,000 difference in REOs? Many of them will likely be pushed into 2012.
According to David M Kinchen of Huntingtonnews.net, "this coming wave of deferred bank repossessions in 2012 is a recent surge in the earlier foreclosure filings that start the foreclosure process. These default filings spiked 33 percent back in August and have remained elevated since then. Scheduled foreclosure auctions, the second stage of the foreclosure process in most states, reached a nine-month high in November, indicating this wave of delayed foreclosures is gradually making its way through the foreclosure process."
The prices at the trustee auctions here in Arizona have gone up about 5% this year as a result of the the deferred repossessions. The lack of new inventory on the MLS in the Phoenix area has also caused a trend of owner occupants attending the auctions, which has resulted in more competition for investors.
We should see the trustee auctions become a more viable source of inventory for investors as this wave of delayed foreclosures arrives.
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