You think times are tough now? You think prices are too low? You think the market is a bear? Well, it is only going to get worse.
Lenders are sitting on hundreds of thousands of foreclosed properties and they will bring them to market in 2011, pushing prices down by about 10% this new year.
Foreclosure paperwork problems held up a lot of banks from processing foreclosed homes more quickly. Those problems are largely solved now. Banks are ready to get selling.
Banks have been in a state of limbo this year about what to do with repossessed houses, and so they have mostly held on to them in order not to add to the nation’s oversupply of homes for sale, Harney told the agents.
“The banks have been saying, ‘There has to be a number [the market] can hit where we can keep the river going without flooding the valley,'” he said.
Apparently, he said, the nation hit that number recently, as prices reached a relative level of stabilization. A Dec. 17 report from Re/Max, for example, said sale prices dropped “only” 1.7% from last year in its 54-city survey, which would indicate general price equilibrium.
But before you break into applause, consider that while the banks were waiting for that sign of stability to decide when to put their holdings on the market, they also were foreclosing at a rapid pace.
“In August, the number of houses banks took back was up 49% over the year before, and September was the greatest month in history for repossessions,” Harney said.
LUKE SAYS: I was in Chicago but once. It was the summer of 1980. My family was flying around a lot. Oy vey! Was it windy at the airport. I’ve seen movies about Chicago. The weather looks brutal. Worse than New York. No thank you!