Breaking down why foreclosures are not as prevalent as you think.
Foreclosures and collapsing real estate markets have been making headlines lately, but the reality might surprise you. While many people are eager to find great deals through foreclosures, the truth is that foreclosures are not as prevalent as one might think. Recent statistics indicate that only about 0.6% of homes are being sold as pre-foreclosure properties. So why aren’t we seeing a flood of distressed properties on the market? The answer lies in the equity that most sellers have in their homes due to rising property prices.
In today’s market, many homeowners have built up substantial equity in their properties, which enables them to sell and extract their equity if they are unable to make their mortgage payments. This trend benefits them financially, but it also means that there are fewer distressed properties available for sale. Consequently, the number of foreclosures on the market remains relatively low.
“It’s important to consider the historical context”
While it may sound alarming that approximately 400 homes enter pre-foreclosure each month, it’s important to consider the historical context. This figure is actually quite average when compared to the height of the housing crash in 2007 through 2009. During that period, we were witnessing a staggering 8,000 to 9,000 homes entering pre-foreclosure each month. Compared to those challenging times, the current rate of 400 homes per month is significantly lower.
Furthermore, it’s crucial to understand that not all properties in pre-foreclosure will actually end up in foreclosure. Many homeowners with equity will choose to sell their homes instead. This further reduces the number of foreclosed properties available on the market.
If you’re interested in learning more about foreclosures or short sales, don’t hesitate to reach out to me at 602-738-9943 or send an email to jason@thepenroseteam.com. I’m here to answer any questions you may have.
