Over the past several years, there have been a flood of distressed properties hitting the market. It is usually a top headline in every news report from every media outlet. But where do we go from here? When will the tide begin to ebb? Have we seen the worst of it? Is it a good time to buy? Those are the questions that many homeowners constantly have on their minds.
The Foreclosure Forecast for 2012
When a home goes into foreclosure, in simple terms, homeowners have stopped making mortgage payments for several months. More times than not, it is involuntary due to job loss, a divorce, excess debt or medical issues.
Over the past few years, due to the recession and the burst of the housing bubble, some homeowners voluntarily stopped making payments on their mortgage and walked away from it simply because the value of the home, their most prized investment, fell sharply sometimes by more than 50 percent in some areas of the country. This caused a spike in the number of short sales and foreclosures which caused home values to drop even further.
In the fourth quarter of 2011, Realtytrac.com reported that foreclosure actions began on 355,945 delinquent mortgages which was an increase from the 347,726 in third quarter. First and second quarters showed that 215,046 homes and 265,087 homes, respectively, were sold to third parties. While this represented a small decrease from 2010, it was still strong enough to keep the housing market from beginning to rebound like we had hoped.
2012 Is Showing Signs Of Increased Buyer Activity
Now that 2011 is over and we have stepped into 2012, what are the predictions for the housing market and, in particular, foreclosures?
According to James Saccacio, CEO at Realty Trac, “processing and procedural delays are pushing foreclosures even further out.” He estimates that “as many as one million foreclosure actions will now happen in 2012 or perhaps even later” and went on to say that “it may scare people but is necessary for recovery.”
Other insiders at Realty Trac feel that these upcoming actions are those that should have taken place in 2011 but did not because of the controversy of the automatic signatures at some of the largest banks in the country.
On the positive end, although there will be so many more foreclosures happening, delinquencies in mortgages will continue to decline. Some homeowners will try to become current on their mortgages through loan modifications or simply paying more as their financial situations improve. The Office of the Comptroller of the Currency (OCC) says that seriously delinquent mortgages are those that are more than 60 days past due.
What does this mean for those who are ready and able to buy? Well, simply put, if you have the ability to buy, now is the time. For investors, rental inquiries continue to rise. There are many homes in foreclosure and going to auction that can be bought, rehabbed and placed in rental programs with property management companies. The key for these types of investments is to have a strong cash flow.
Buying A Second Home A Good Idea?
For the buyers who have the ability to buy a second home, there are so many opportunities in the popular states where people migrate for the winter. Florida, Nevada, California and Arizona were some of the hardest hit states. It is well worth the effort and research to look at the prospects there.
Finally, if you live in an area where the market is somewhat on the rebound or are relocating, you can seriously look into upgrading from your current home. Because of the burst of the real estate bubble, more than a few homeowners who bought bigger and better either lost their homes or are in the process. There are great deals out there to get more for your dollar.
With all the negative press about foreclosures, there is finally light at the end of the tunnel. Mortgage holders will hopefully siphon through the remaining backlog of foreclosures so that the market can balance itself out. Hopefully over the next few years, this industry will again be in full swing and truly back in business…for everyone involved!
For more information about the Foreclosure process you can check out Linda Wise’s awesome Cape Canaveral real estate website where you have access to all homes for sale in Merritt Island and surrounding areas including the beautiful Indian Harbour beach real estate area.
