Jun
Housing Market May Not Be All That Bad
Written by Leo Franklin
Shadow inventories are down nationwide
Shadow inventory has been hanging over the housing market for some time. These are homes where the home owner has fallen several months behind on their mortgage payments, are already in the foreclosure process or have been repossessed and are owned by banks but not listed for sale.
Last year, real estate market watchers warned that the shadow inventory could be unleashed at anytime and millions of home would be dumped on the market to drive down prices. CoreLogic, a firm that tracks a variety of real estate data, recently said that their estimate of the shadow inventory fell in April (the latest available data) to its lowest level in more than three years.
“In some ways, the shadow inventory was aptly named because shadows can sometimes appear larger than the actual problem,” Daren Blomquist, a RealtyTrac vice president, told Bloomberg recently. “The uncertainty of how much distressed inventory would end up on the market was more of a problem than what the actual numbers are turning out to be.”
CoreLogic said that the shadow inventory fell about 15 percent in the past year and now stands at about 1.5 million homes, the lowest level reported since October 2008. At current sales level, that would be about four months of inventory, down from six months of supply a year ago.
Shadow inventory down, net buying up
Other recent data has also pointed towards a recovery in the real estate market, and the worst of the problems seen in that market over the past several years may be behind us. Homes that are in foreclosure generally sell at a discount price.
Many home owners who have fallen behind on their mortgages are now being approved by their banks for a short sale, which is a sale completed at a price below the mortgage balance.
These types of transactions have attracted buyers and that has helped to stabilize prices.
While this news is generally positive, it still might not be the ideal time to sell. Stable prices are better than falling prices, but many home owners would prefer to wait for better prices which could be several years away. A reverse mortgage could allow you to cash in on the equity of your home now without having to sell. That way, you could participate in the real estate rebound which may very well be starting in many parts of the country.
These loans are available to home owners who are least 62 years old, and could be right for you.
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