Can a Jump in Foreclosures Be Good for Real Estate?
With third quarter first time default notices increasing 14% over second quarter nation-wide, and Routt County Colorado, home to Steamboat Springs, trending upward as well with 86 new foreclosures (a 39% jump from Q2) documented from July-September, can we assume this is good for the real estate market? For the record, the Steamboat Springs’ real estate market saw 104 default notices in the first quarter of 2011.
This latest spike in foreclosure notices signals that Steamboat Springs’ home owners who are delinquent on mortgage payments will likely see their homes taken back by the lender sooner rather than later. And how can this be a good thing for the Steamboat Springs’ real estate market?
As long as there is Shadow Inventory clouding the housing inventory outlook, sellers hesitate to put homes on the market and buyers wait to see what “hot deals” are yet to come on the market. A pick-up in foreclosures, with Shadow Inventory coming out of the shadows and into the market, puts the cards on the table, moves the inventory through the selling process and as such could be the start of a true turnaround for the US housing market and the Steamboat Springs real estate market as well. While no one likes to see their neighbor lose their home, having a home stuck in bank backlog limbo knowing it will in all likelihood end up in foreclosure, means roadblocks are thrown up on many fronts. Buyers and sellers “wait and see” what’s going to happen and the multiplier effect of that happening from Steamboat Springs to Phoenix, to Orlando combines to stall the housing market nation wide.
Reality is that banks are on track to repossess approximately 800,000 homes nationwide this year which is down from more than a million last year. It remains to be seen both nationwide and in Steamboat Springs whether the third quarter up-tick in foreclosure notices is temporary, or a sign that lenders have buttoned up their foreclosure processes and are now addressing the backlog that arose from multiple factors over the past year. It is important to bring the Shadow Inventory into the market, allow the market to correct as necessary to work through it, and in the process began the macro corrections needed to revive both the national and Steamboat Springs’ real estate markets. As a second home destination, market stability both where buyers have permanent homes as well as in Steamboat Springs where they are looking for a vacation home, is an important factor in buyer confidence and motivation.
—For more information on buying real estate or questions regarding Steamboat Springs real estate or renting a home in Steamboat Springs, Colorado, feel free to call Charlie at 970-846-6435 or write me an email at: email@example.com.