A new wave of foreclosures is getting ready to hit the market as a result of the pressure being placed on banks by investors and the US Government to increase their assets. This includes selling off assets, issuing stock (see WSJ article yesterday, More Banks Tackle TARP, Capital Gaps), and liquidating their REO (real estate owned) assets. This is more good news for investors and homeowners seeking to get bargains on foreclosured homes in the Prescott, Prescott Valley, Chino Valley, and Dewey-Humbolt markets.
Some say that banks have been holding off on listing their existing REO inventory to avoid putting a glut of homes on the market and in fear of having to realize the losses that will incur when they actually sell the homes. This so-called, “phantom inventory,” is keeping some buyers on the sidelines as they wait for the new wave of inventory to hit.
Other buyers are stepping in to the market now, taking advantage of the low prices currently available. Will prices continue to decline? Time will tell, but inventories are declining in many metro areas, so pricing will vary by region. Don’t read national news reports like this one and directly apply them to your local market.
Related Posts on the Web:
Phantom Inventory from Housing Kaboom
Phantom Inventories can be Deceiving (Simi Valley housing report)
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This a good training even for new agents that haven’t sold their first property. Many clients complain about their experience when buying a home in foreclosure or in a short sale. This is just the lack of knowledge on the topic.
Really this is a useful post for new agents.
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