I've had two clients ask me about the Tsunami of impending foreclosures today. So let's look at the numbers as the stand today.
If you compare REOs (currently for sale foreclosed on), auctions, the ratio is about 2:1 or a 100% increase. And Pre-foreclosures are running twice the auction rate. So the supply will increase.
However now compare supply to the current burn rate.
If you think of pending sales as the rate at which supply is being eaten on a monthly basis, demand is greater than future supply. The only market that may have an oversupply is Newark.
These numbers are not perfect since Foreclosure Radar doesn’t capture every pre-foreclosure. Also Pending Sales includes Short Sales which can last for more than 30 days, so consumption is exaggerated, and I'm not factoring in the supply of regular sales in the market.
If you've been shopping however, you know there are more buyers than properties that suit their needs. I'm not concerned about the "much talked about Tsunami of foreclosures", since demand is waiting to absord the new supply.
Additionally, this morning, when you dissect these numbers based on a buyer's criteria (ex 3BRs, 2 BAs, 1300 sqft priced less than $400,000) and you'll the numbers of homes available that suit your criteria, isn't a Tsunami, more a trickle.
Good house hunting All.
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