The number of foreclosed homes is escalating — economists are projecting that selling the current amount of more than 872,000 bank-owned properties will take approximately three years; meanwhile, home values nationwide may fall another 5 percent by the end of the year, according to The New York Times.
Foreclosures are expected to more than double in upcoming years, but currently, markets such as Chicago and Miami struggle with rates of two repossessed homes for every one that is sold. While a better rate than some areas, the statistics can still be a bit discouraging as the housing market tries to work toward recovery.
The efficiency of selling foreclosed homes is a large issue, threatening banks and lenders alike with billions of dollars worth of loss. RealtyTrac says the foreclosure process, on average, took 494 days in March.
Fannie Mae also found that many homeowners are walking away from their mortgages, finding that “27 percent of people think it’s acceptable to walk away from a mortgage if they face financial distress, twice as many as did a year ago.”
Between an increase in foreclosures and an overall decrease in median prices, real estate professionals are facing challenges, even as they head into what is typically marked as the busiest selling season.
“Unfortunately, there is no magic bullet that will make our REO backlog disappear anytime soon, but if lenders, real estate professionals and government put their heads together, they should be able to find ways to make that process more efficient and less painful,” said Edward Lukasik, broker/owner of RE/MAX Professionals.