Ripples continue: REOs hurting sales

Quick read from the Times today: “As Lenders Hold Homes in Foreclosure, Sales Are Hurt.” The gist: Banks and other lenders own more than 872,000 homes in the country, thanks to all those foreclosures. More are in the pipeline. That pushes down prices, and therefore property values. More people are underwater, which means more foreclosures… you get the idea.

Over all, economists project that it would take about three years for lenders to sell their backlog of foreclosed homes. As a result, home values nationally could fall 5 percent by the end of 2011, according to Moody’s, and rise only modestly over the following year.

 

 

About Andrew Kantor

Andrew is VAR's editor and information manager, and -- lessee now -- a former reporter for the Roanoke Times, former technology columnist for USA Today, and a former magazine editor for a bunch of places. He hails from New York with stops in Connecticut, New Jersey, Cincinnati, Columbus, and Roanoke.
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2 Responses to Ripples continue: REOs hurting sales

  1. Christen Campbell says:

    So true…the lower foreclosure prices are definitely hurting other sellers! I’m seeing this a ton! But how can we stop it, or slow it down if appraisers are allowed to use distressed properties as comps? It is very frustrating because it is a vicious cycle….

  2. Curtropolis says:

    This snowball can’t be stopped but the impact could be lessened if the banks and mortgage companies would invest into bring those homes up to mortgage standards for the new buyers. They could call these marketing funds but companies must remember one thing; if they were going to loan money on those homes and they had a foundation problem, needed painting, flooring, roof and other repairs – would they approve the loan. The answer is NO! The people looking to buy other than the investor are the buyers looking for a home and they are not able to spend money on repairs that can’t be done until after the closing. The attitude and way we all do business must change to accommodate the task at hand. No one wants to spend extra to sale a home they are already losing money on, but the key is to Sale. You want to lesson home values from dropping, improve the foreclosed properties to compete and they will sale. Last but not at all least the banks & mortgage companies must get up off their butts and get the paperwork processed like their jobs depended upon it. I’d like to hear your comments.

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