July 9, 2010: Foreclosures Down; Repossessed Properties Up. Mortgage Rates At New LowForeclosures are still hindering our real estate market. While new foreclosures are down 32% from April 2009, bank repossessions (the final process in a foreclosure proceeding) are still rising. According to RealtyTrac, almost 900,000 bank owned homes have yet to be sold; plus 1.2 million properties are in various stages of foreclosure, and 5.5 million loans are more than 60 days past due. What appears to be happening is that the banks are not putting all of their bank repossessed homes on the market; one estimate is that only 30% of bank owned homes are on the market at any given time, with a 70% “shadow supply”. Since repossessed properties tend to sell below market prices, this may well limit any real price appreciation for some time.
Interestingly enough, the more expensive homes (homes with loans over $1 million) have seen a large increase in forecloses recently. According to the New York Times, one in seven homeowners with loans in excess of $1 million is seriously delinquent, versus one in twelve for mortgages under $1 million. For investment homes with loans of more than $1 million it’s even worse, with 23% now delinquent.
On the positive side, mortgage rates are even lower now than last week, with a 30 year fixed rate mortgage now around 4.5%. And with the 10 treasury beginning to rise, and projected to continue to rise, these rates will probably not last for long.
Further to my last blog, closed sales in June for Evergreen were down 8.3% from May, and down 15% from June 2009; but closed sales in June for the Conifer and Pine area were up 28% from May, and up 33% from June 2009. Furthermore, the months supply of inventory for both Evergreen and Conifer continue to go down; and the months supply of inventory for Conifer is at a 2 year low.
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