Per an article released by “HousingWire” on Friday 5/27/11, (http://www.housingwire.com/2011/05/27/fannie-mae-issuance-drops-to-lowest-level-since-january-2009?utm_source=feedburner&utm_medium=feed&utm_campaign=Feed:+housingwire/uOVI+(HousingWire)&utm_content=Google+Reader), foreclosure starts are down significantly from over a year ago. But the article goes on to say that in lieu of the number of foreclosures being down from a month or a year ago, they are still high compared to 2 years ago.
If you jump down a little bit further, the article highlights the fact that there are numerous headlines that pending sales for April are down. Mind you I haven’t seen many articles account for the fact that April 2010 was the deadline for housing stimulus program ($8K tax credit for homeowners who closed by 4/30/10; that deadline was subsequently extended to 6/30/11 to allow time to process short sales and clogged lender processing pipelines). That being said, will we see the same headlines for May and June also???
If you then skip to the bottom of the article, a few lines very thought provoking:
“The foreclosure pipeline remains bloated, according to the report. Loans in the 90-plus days of delinquency or in foreclosure outnumber monthly foreclosure sales by a factor of almost 50:1. The foreclosure and seriously delinquent inventory stands at more than 4.2 million homes, yet just 84,219 foreclosure sales occurred during the month of April.
The numbers suggest that lenders are still having trouble restarting the foreclosure process that came to a halt last fall amid robo-signing allegations.”
If that is in fact the case and that these foreclosures will eventually make it back to the bank if they can’t be successfully short sold or the mortgages modified. That would mean that locally in the Phoenix Metro area inventory could be released again, easing some of the pressure on the market for too many buyers competing for too few homes. That would bring us closer to having a balanced market (neither buyer’s, nor seller’s market) and be a welcome relief to many buyers who are frustrated with seeing the same stale listings with prices that are not necessarily indicative of condition. Pending sales may slow just a bit for the unbearably hot summer months, but if buyers who may be more inclined to delay or cancel summer vacations with the intention of scoring a great buy, that may not be the case. Time will tell.