Friday, March 7, 2014

Rate of Foreclosure Down, Very Good Indeed.

The rate at which banks are foreclosing on property has dropped substantially over the last twelve months. In general this is of course a very good thing indeed. The National Association of Realtors® has published an article on foreclosure data with which a link to the public portion is included below. Generally foreclosure rates run under 1% in a healthy market and many markets are already at or below 1% foreclosure rate.

Low foreclosure rates inspire buyer confidence and keep under market priced 'as-is' REO from undermining local prices. This can help move the market upward.

Not everyone however benefits from reduced foreclosures. Investors looking for non-financable homes at a bargain price are beginning to feel the pinch caused by a lack of inventory. The last thing a real estate investor wants is competition from an owner occupant buyer. Owner occupants typically use financing from a bank so investors can capitalize on cash only properties without a primary residence buyer inflating the price.

All of that aside, lower foreclosure rates is good for the market and good for the economy.

Public version of the NAR article on foreclosures at the link below.
Foreclosure Rates and Changes: Q4 2013 vs. Q4 2012

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