Slowly but Surely, Inventory of Distressed Properties Is Going Down
The are still a couple of million of distressed properties in the market, but the figure is not as bad as it seems since around four years ago, the U.S. was actually sitting on a five-million supply of unsold distressed homes.
Recovery factors already in place
Although the supply of distressed properties for sale will take around five years to flush out of the market, the number is steadily going down and almost every significant factor that is related to the housing industry is showing a positive trend. Construction activities involving multifamily and single family housing are up and home sales have also risen in various key areas of the U.S.
More residential property sales are also expected to be recorded before 2011 ends as pending sales trended upward in October and mortgage rates continue to hover near record lows. Analysts believe that most real estate investors are seeing the end of the tunnel and are already getting ready to take advantage of the boom that will inevitably come four or five years down the road.
Home prices remaining low
The prices of residential properties continue to be low, mainly because of distressed homes for sale which are being offered very cheaply. In September, residential property prices plummeted in almost all key markets, with the exception of New York, Washington D.C. and Portland.
The September price decline was not good news for the housing market in general, but this does not mean that the market is taking two steps backward after putting one foot forward. What is less obvious to the casual observer is that the low prices are helping cut down the inventory of distressed homes in the U.S.
Distressed properties may still be numbering by the millions, but the total has actually gone down from when the housing crisis started and continues to go down. Lowering the inventory of unsold real estate should be the top priority if the sector is to recover.
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- U.S. Housing Market Learned a Thing or Two from the Surge of Distressed Properties
- Construction Market Stirring Despite Cheap Foreclosed Property
- Fed: Foreclosed Property on Sale Undermines Western Recovery
