Shadow Inventory: More Houses Will Soon Be Available for Sale By Alexis Craig, RISMedia
All signs point to an improved housing market—home values are up by about 30 percent since 2012, they’re selling faster, and overall demand is high. But this recovery has led to a dramatic decrease in the overall housing inventory.
Fortunately, there might be some relief from the shortage in sight. The inventory that has been hiding in the shadows for years is finally coming into the light.
Why Is This Inventory Up for Sale? With the improved market, it would be natural to think the impact of the housing crisis is over, but there are still some old foreclosures in the pipeline that are ready to pour over the dam of legislation and legal delays that have been holding them back.
Banks and lenders are starting to make the final push to flush out homes in the foreclosure pipeline, resulting in a higher surge in repossession and REO listings. The backlog of foreclosed homes that was created by lengthy judicial reviews and long foreclosure timelines are entering the market in states like New York, Florida, New Jersey, Arkansas and Hawaii
The possibility of new foreclosures in 2017 is also impacting the housing inventory estimates. In 2016 and beyond, many homeowners may find it difficult to make their mortgage payments as “resets” are rolled out. For example, the government’s Home Affordable Modification Program (HAMP) provided temporary relief to borrowers during the housing crisis, but that relief ended after five years. These payment resets will increase the loan payment for nearly 900,000 homeowners—some of whom will find it difficult to keep up with their mortgage in this sluggish economy.
HAMP isn’t the only program. It’s estimated that about two million modifications will face interest rate resets in the coming years, and a high percentage of those homes are in depressed markets with little to no equity in their homes.
What’s the Impact? A backlog of foreclosures are finally available for sale, but there is likely to be a second wave of foreclosed homes since the foreclosure problem wasn’t solved, but delayed. You can expect REO listings and foreclosures to increase in the next coming years. How this impacts the real estate market largely depends on how fast these homes enter the market.
Must-Have Home Features? Think Long-Term By Maria Patterson, RISMedia
When you’re considering purchasing a new home or adding a new feature to your existing home, it’s important to consider the long-term impacts of your choices.
According to a recent report by Kiplinger, there are seven features that will help sell a home faster: a laundry room; exterior lighting; energy efficient appliances and windows; a patio; hardwood floors; garage storage space; and an eat-in kitchen.
Conversely, some of the most unwanted features in a home, according to a National Association of Home Builders study, include a pet-washing station, an elevator and a wine cellar.