Homes for sale Everett: Shadow inventory of homes will delay recovery
How will the shadow inventory effect homes for sale in Everett? First let’s define what a shadow inventory is. Shadow inventory is bank owned residential property that is not on the market. This is also called the REO (real estate owned) inventory.
Now some facts:
Zillow says the up to 31% of current home owners would sell if the market price came back. If all these homes were placed on the market right now they would depress the market prices all over the nation.
The Wall Street Journal and Bank of America say there are between 3-4 million homes held as REO property right now. With foreclosures up 12% over last year but inventories in the top 28 markets in America are down. Nobody really knows why.
It is estimated that 60,000 to 65,000 Option Adjustable Rate Mortgages will be coming due every month for the next 2 years. The Option ARMs are loans where the borrower can pay less that the full payment. Almost all of these homes will be upside down in equity. That means they will owe more than the home is worth.
Now for my speculation: What if the banks have used TARP money to avoid puting the REO inventory on the market? By putting the REO inventory on the market the bank must recognize the loss. It would depress the market for a while but in a little time the market would adjust and recover. I think many banks have used TARP money to pay bonuses and salaries and avoid painful loss recognition. Japan just went through 20 years of economic downturn because they woiuld not recognize the losses on the balance sheets of their banks. Recognizing the losses would have meant loss of face. Are the bankers of America doing the same thing but using tax dollars to fund this?
Every mortgage loan is very important to me, so I handle each one personally. My background includes extensive knowledge of the real estate market, real estate finance and personal taxation. If you are looking to refinance or purchase real estate please give me a call or email. I will be happy to discuss all options with you. Currently I have access to 70+ lenders. I have access to 4 different credit repair agencies. My goal is to become your lifetime lender. thefhaloanguy@aol.com
