Summer is Here and Roanoke, VA REO Homes are in the Shade
By Chad Corbett on in Uncategorized with No Comments
If you ask a Roanoke Realtor what the market is like they will likely tell you they’re having a banner year and they need more inventory. That is great news to anyone involved in real estate because it means our market is clearing distressed houses.
However, there are literally hundreds of foreclosed homes sitting vacant in the Roanoke Valley that are not on the market and nobody seems to know why. Sure, we all have our theories like “Well it’s because the banks are bogged down.” or “It’s the government’s fault because of the slow down last year due to the robo-signing investigation.” but could it be because the banks are intentionally controlling the supply to increase the prices and cut their losses?
RealtyTrac, the leader in foreclosure data published an interesting article this week talking about this issue on a national level. “In the May 2012 issue of the Foreclosure News Report, real estate attorney, investor, author and trainer William Bronchick argues that banks are “hoarding foreclosure inventory” and overvaluing their real estate owned (REO) properties in an attempt to squeeze more money out of their distressed portfolios. Bronchick believes that the growing glut of REO is hurting real estate markets where inventory is tight…”
Read the full Article Here: REO Inventory Ballooning as Banks Hold Back Housing
Regardless of the “why”, slowing the supply of REO homes coming into the market only slows the overall recovery. As long as there are vacant homes sitting in neighborhoods and intelligent investors who are waiting for those to hit the market the recovery will be slow. There is certainly no shortage of supply with 2 – 8 million REO homes in the “shade” and at least that many more that are 90 days or more past due on their mortgages. There will be no recovery and no real appreciation until we can clear these distressed homes and return to a “normal” supply level.
For now all we can do is wait for that next big deal and be the first offer of 20 in when the 3 bedroom ranch on the corner finally gets listed. Maybe after the election there will be more certainty in where our economy is headed and lenders and politicians will streamline the asset liquidation so we can see a “normal” housing market sometime this decade.
– Chad Corbett, President of REsolutions Real Estate Services