NEW YORK – Feb. 9, 2015 – Analysts expect the nation's housing recovery to push onward in 2015, supported by new types of investors and more traditional sales. At the same time, the still-sizable foreclosure inventory will continue to influence home pricing in surprising ways.
Guy Cecala, publisher of Inside Mortgage Finance, confirms that the sector is returning "to a much more traditional housing market, where investors play a much smaller role and the market is more dependent on regular buyers."
RealtyTrac data shows that 421,164 residential properties are still bank-owned, with another 642,927 in default and in the foreclosure process but not yet repossessed.
Daren Blomquist, vice president at RealtyTrac, states, "So there's a lot of property still in the foreclosure pipeline."
At the same time, much of the "shadow inventory" of foreclosures -- residences in various stages of foreclosure, but not yet on the market -- never ended up on the multiple listing service (MLS).
Instead, lenders have been able to sell off inventory in bulk to large REITs and other investors. As a result, these "sales" did not result in as much price drag as some analysts projected.
Fewer distressed sales will actually boost prices overall in 2015, states Tom Popik, research director of the HousingPulse Tracking Survey. He reasons that REOs (real estate owned, an industry term for lender-owned properties), short sales and damaged REOs all trade at a discount of 25 percent to 40 percent of regular home prices.
HousingPulse calculates that distressed sales were 23 percent of total sales last month, a slight increase from the lowest level in four years.
Source: Investor's Business Daily (01/30/15) P. A10; Doler, Kathleen
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