Real estate experts have been warning for months now that we can expect to see a flood of new foreclosures on the market this summer. With more foreclosures, this will surely be the trigger for home prices to drop even further. So, is it time for homeowners to start worrying again?
Up until now, we have seen the number of reported foreclosures drop month after month. According to a report released by CoreLogic just last week, February saw foreclosures fall yet again, from 71,000 in January to just 65,000.
However, economists are warning that the number of foreclosures is set to rise sharply once more, as banks look to clear a huge backlog of defaulting homes in time for the summer selling season. Mark Fleming, chief economist with CoreLogic, told AOL Real Estate that he expects foreclosures to start picking up any time soon.
Interestingly though, Fleming claims that the rise in foreclosures won’t necessarily be a bad thing for the market overall:
“I would like to see the pace increase, because that means we’ll be able to work off the inventory faster,” he says.
Fleming goes on to claim that the recent improvements we have seen in local economies and real estate markets may even be enough to mitigate any pressure from the new wave of foreclosures. Surprisingly, Fleming predicts that such is the improvement that home prices will continue to rise in some markets.
Not everyone is as optimistic as Fleming however. RealtyTrac have said that they expect the number of foreclosures to jump by as much as 25% by the end of the year, totaling almost 1 million.
Daren Blomquist, RealtyTrac’s vice president, believes that the summer foreclosures will have an impact, at least in the short term:
“All of this will result in more foreclosure pain in the short term as some of the foreclosures that should have happened last year instead happen this year.”
Source: AOL Real Estate