New research compiled by LPS Applied Analytics and published in USA Today paints a particularly gloomy picture of the foreclosure situation, with the huge backlog of foreclosed home likely to take an average of 8 years to clear at the current rate of sales in US states.
The shocking report revealed that in three states – New Jersey, New York and Washington D.C. – it could take as long as fifty years at today’s sales pace to clear out all foreclosed homes clogging up the inventory, which includes those homes that are already in the process of being foreclosed, and those that are described as “seriously delinquent” and likely to be foreclosed soon.
Speaking about the findings, New Jersey Association of Realtors president Allan Dechert likened the situation to having a huge amount of water blocked up behind a dam, saying that “We hope it’ll be let out slowly and not all at once.”
The situation is worsened by the fact that the process of repossessing homes has been significantly slowed down, following the scandal over bank’s foreclosure procedures last year. As a result, lenders are applying more checks before they process foreclosures, which has led to even larger backlogs being created in numerous cities.
For those states where foreclosures don’t normally involve the courts, foreclosed home inventories should clear at a much faster rate – less than three years in many cases, shows the research from LPS.
But those states which do see court involvement in foreclosures could take decades to clear their backlogs. According to the research, both New York and Washington D.C. have a “pipeline ratio” (estimated length of time to clear backlog of foreclosed or seriously delinquent homes at the current sales pace) of 57 years. New Jersey is not far behind on 52 years, while the states of Maryland (21 years) and Connecticut (20 years) also potentially face decades of housing turmoil.