REOs Heating Up The Summer

Foreclosure Numbers Surge In July
There are no two ways about it. RealtyTrac’s July report demonstrates the challenges inherent in this housing recovery. Once again, U.S. foreclosure numbers escalated into record territory—up nearly 7% over June and 32% by year-over-year comparison. The usual suspects (Nevada, California, Arizona and Florida) accounted for over 200,000 of the 360,149 total notices in July.

With job losses on the rise and median home prices suffering dreadfully in the second quarter, an increasing number of homeowners dipped underwater. And despite the federal government’s desire to restructure four million loans, the reality is that a mere drop in the bucket of 235,000 homeowners have been able to take advantage of the Making Home Affordable program.

Uvestor Opportunity:
First of all, the previous Uvestor Opportunity advice still holds. For those who can position to buy in the coming year, there should be low prices, ample inventory and quite a few short sale possibilities.

In addition, it should be noted that with so many REOs out there, the rental market might yet see the spike that was expected earlier in this crisis. Homeowners usually do not go straight from homes to cardboard boxes, and staying with family and friends is not as tenable in practice as it is in theory. People walking away from underwater mortgages will need some recovery time for their credit, especially as tight as loans are at present. Given all these factors, some investors will evaluate their properties and see wisdom in switching gears from a selling mode to a renting mode. Take return on investment where it is available.