Is There A New Wave of Foreclosures About to Hit the Market?

There seems to be belief by a lot of the public that house prices and interest rates will continue to move lower. I was reading another blog today that stated they had potential buyers who would not buy because they thought the "government" would do more to help them buy a house. I'm afraid some of these people are going to be in for a financial shock if they wait to long. Despite the large inventory there are signs that real estate prices are starting to stabilize. I have met with several first time home buyers in the last week or so that are getting pre-approved for their loans and are actively looking for a home. Those waiting need to consider the cost of the loan. Interest rates moved down in late December and early January but have been moving up since despite the Federal Reserves effort to move them down by buying mortgage backed securities. Consider this possible scenario: You can buy today but need to borrow $300,000 at 5%. The payment is $1,610.46. You wait and get a lower price on the house and need to borrow only $280,000 but the rate has increased to 6%. The payment is now $1,678.74. Rates are at historic lows. Don't expect them to stay there forever.

I agree with Alan, I think people keep thinking that if they wait things will get even lower.  The problem with that obviously is that you don't see the bottom until we are on the way up.  The other thing is that the "good" listings are drying up.  People who don't have to sell are not and so you are finding that many of the properties on the market are not particularly desirable.  I am in a situation right now where we are one of 8 offers on a property simply because it was one of the few in the price range that was actually nice.

It is interesting.  I had a short sale listing that went to foreclosure mid November and it is still not on the market.  Places are out there - but the banks are holding on to them!

I heard that interview and extended my prediction for a bottom from 2 years to 4. 

It's rough out there.

All I know is that my inbox has been flooded with BPO orders over the last few days.  Looking at the addresses I doubt seriously they are for refinances.

Ken, I also have been seeing that there are short sale properties that went to foreclosure and have not gone on the market as REO properties. Also there is possibly another round of ARM adjustments out there.

BPOs are flooding into our office as well. We think so.

Ken, In my opinion if the prospective buyer is focused on thinking short term they are not going to buy until home prices stabilize. By the time they will know prices have stabilized it will be because prices are going up.

If the buyer is focused on the long term then reduced prices and reduced interest rates will be an inducement to buy.

Until we see price stabilization refocusing the buyer to long term thinking will be the key.

Jay

This is a very tough thing to read.  I hope there is some relief coming soon for all of us.

Our market has looked like it's been stabilizing. But who knows what the future holds? There have been so many contradictory predictions for so many years. I prefer to keep praying. God is the only one who really knows what's going to happen. And He can also change the current path, and overturn what all the so-called experts are predicting. I guess I'll keep my hope and faith rooted firmly in Him =)

The next wave that has been predicted are the homes that are upside down due to devaluation of the market.  Home sellers who stalled retiring or down sizing maybe forced to enter the market without sufficient equity to pay marketing costs.

Thanks for writing about this. I agree that we might be facing a new wave of foreclosures in 2010. I wrote about it for my CBS MoneyWatch blog.

http://moneywatch.bnet.com/saving-money/blog/home-equity/4-reasons-why-foreclosures-might-increase-in-2010/1368/?tag=col1;blog-river

here we are almost a year later and still waiting...

That would hurt  current home prices even more. How low we could go ?

*Still* waiting! Rumbles everywhere but no significant releases to note.

Hi Ken, This post was written in 2009. I think we are now starting to see foreclosures hitting the market again. We sold many a few years ago and then they just stopped. We were assigned a few this past week....I think the floodgates are opening...

This article suggested mortgage delinquency rate has fallen.  Interesting all the different perspectives.

https://www.housingwire.com/articles/mortgage-delinquency-rate-falls-to-lowest-level-since-1979/?utm_campaign=Newsletter%20-%20HousingWire%20Daily&utm_medium=email&_hsmi=269982313&_hsenc=p2ANqtz-8nIIxG1yZnTZuqfyvUCbBEXD4HW9CmANqlJqP3eB8cMg66h2Te8vbmuCsfyhCoyCl8DVJYCrO9uugi99xHd-ufp5R9yIicsemdiXbWdlE-UF3vJsE&utm_content=269982313&utm_source=hs_email