Even as a few rays of hope peek out for housing, a dark cloud of unlisted and unsold foreclosed homes threatens to further delay a recovery and undermine lenders' financials.
The government is riding in with new programs almost every week, including Monday, that may rescue lenders. But they also cause paralysis in the short term.
Lenders are holding "between 600,000 and 700,000 residential properties that are not on the multiple listing service (MLS)," said Rick Sharga, senior vice president at RealtyTrac, a foreclosure listing firm in Irvine, Calif.
This shadow supply isn't counted as part of the housing inventory. There were 3.8 million existing homes on the market in February, equal to 9.7 months' worth at the current sales pace.
Add in the shadow supply and selling all the available homes will take even longer, and that suggests prices have even further to fall.
This is a really big issue with the housing market -- and one that is woefully underreported.
1 comment:
I've been waiting for someone to notice this!
I have attended the last seven weeks of foreclosure auctions at the Nassau County courthouse in Mineola NY, and to say that I am shocked is an understatement.
I have watched 193 homes go up for auction and a grand total of 11 of them have gone to bidders. That means that the banks now own 182 homes in one of America's richest counties because the vultures in the room -- and WOW do they feel like vultures -- don't think those homes are worth the price.
The only homes going are the ones that are truly as cheap as dirt and located in the toniest of neighborhoods.
Hear this: There is a timebomb of excess inventory just waiting to blow under the housing market.
And to echo Bonddad: Housing is nowhere near the bottom.
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