What’s that lurking in the “shadow”?
Barclay’s Capital released a study yesterday indicating that, according to their calculations, there are currently fewer banked-owned properties for sale than previously thought. This might come as a surprise to those who work in the real estate industry. Their numbers show that at the end of February there were 480,000 homes for sale nationwide that were bank-owned. This differs from Realty Trac’s estimate of over 700,000.
What I thought was more interesting however was their predictions for “distressed sales” moving forward. According to their thinking foreclosures will continue to increase as will the supply of bank-owned property on the market for the next 20 months. They believe that the supply of bank-owned homes will peak in January of 2012. If you’re a bargain hunter whose been waiting on the “perfect time” to strike a deal you may interpret this to mean that there’s plenty of time. And you may be right. BUT, there is a significant amount of debate about the correct way in which to make these estimates. The reality is that no one knows for sure and the variables they use to make these calculations are assumptions that are subject to change drastically. It’s always good to exercise patience and employ due diligence when making a large investment. But, I think some of these reports are as credible as fortune cookies.