Corona Virus Impact on the Foreclosure Market
Due to the economic impact of the Coronavirus, analysts predict a prospective rise in the number of foreclosures over the next several months. As such, as a real estate investor it’s wise to make sure you keep a close watch over changing trends in the distressed market. In this article, we explore how COVID-19 may impact foreclosures in the future and how you can ensure you stay alert to any changes in the market.
In addition, while US Congress has temporarily enforced deferments on mortgage payments, many may struggle to keep up with mortgage payments in the future due to the hit to jobs and financial savings.
Moreover, while several banks are suspending foreclosure, it’s unclear how long the majority of these will last, since the majority of institutions have not provided a suspension time frame.
The Future of the Foreclosure Market
Industry analysts predict that after an extensive period of contraction, the number of foreclosures is predicted to grow rapidly next year. The number of foreclosures could also see a sharp rise over the coming months due to the greater unemployment rates and financial difficulties due to COVID19.
Recent reports show that unemployment applications have risen drastically – with approximately 5 times the number of out-of-work Americans signing on than the previous record number of claims. These troubling economic factors may mean that many homeowners may unfortunately struggle to keep up with their monthly payments – potentially leading to a higher rate of foreclosures.
Why Invest in Foreclosures in the Current Climate
Due to the fallout of the current pandemic, many real estate investors are reluctant to invest. However, foreclosures may in fact be one of the smartest residential real estate investments to consider in current circumstances.
Foreclosures offer a cautious investment in light of the uncertain real estate market and fragile economic atmosphere – as we see hits to other property investment asset classes – such as commercial office space. In addition, newly foreclosed properties often require minimal renovation works, offering a higher ROI for you as an investor.
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