What is Lurking in the Shadows of the Housing Market?
For the last few years, the press has been reporting on the “shadow” inventory of foreclosures that was getting ready to hit the market. The “shadow” inventory was a large number of vacant or delinquent homes that were threatening to sink the housing market. We heard these ominous predictions from almost every news source. They warned that the large number of underwater and delinquent homes would hit in a wave of despair that would drag down the housing market and homeowners with it.
There was just one problem: The numbers did not support it.
Doubling down on their incorrect predictions, housing pundits began warning about “Vampire REOs” and “Zombie Foreclosures.” Now these Zombie and Vampires were threatening neighborhoods across the country; falling into disrepair and dragging down home prices. Zombie Foreclosures are vacant homes that were in process of being foreclosed. Vampire REOs were foreclosed homes that were still occupied by the previous owner. I guess they thought “Shadow Inventory” was not scary enough for the American public.
In their rush to “sell” the news and not report it; these so called journalists forgot the number one rule: All Real Estate is local!
In addition, they also forgot to report on several other key facts.
First, the number of homes in the “shadow” inventory has fallen to less than half of the peak that occurred in 2010. According to the recent Trulia Housing Barometer, we are much closer to normal levels than we are to a bust in the housing market.
Second, the highest concentration of homes in the “shadow” inventory is located in states with a judicial foreclosure process like Florida, New Jersey and New York. The lethargic judicial process caused more delays in foreclosures than all the other reasons combined. In fact, the judicial foreclosure process in New York takes ten times longer than the non-judicial process in Tennessee.
Last, they failed to project the effect of an improving economy on the housing market. The initial surge of foreclosures in 2007 – 2008 was mainly due to sub-prime lending. Most of the remaining wave of foreclosures resulted from people losing their jobs. With more people back to work, the engine of housing recovery could rely more on homeowners and less on investors. The increase in demand helped to push prices higher and take strain off of the market.
With the housing recovery well under way in Tennessee, the unbelievable values are disappearing quickly. Currently, there are more people looking for homes than what is for sale. So many people are looking for value in Nashville that most foreclosures have multiple offers as soon as they hit the market.
This once-in-a-lifetime opportunity may be coming to an end, but it has not completely passed you by.
Great deals can still be found in Nashville, but only if you know where to look.
If you want a great deal or to get the maximum price for your home... Call Steve Jolly at 615-519-0983.
FYI - Do not get your Nashville news from the National news media.