Foreclosures Up 129%, And Rising
Foreclosures are rising. Is it enough to shift the market, or just fuel real estate wholesalers with more deals to do?
According to ATTOM Data foreclosure filings leapt almost 30% between January and February this year. With a year over year increase of almost 130%.
That sounds like a lot, but it still only means around 26,000 new foreclosure filings for the month. That is sadly many individuals and families that could be losing their homes. Though it certainly isn’t enough to satisfy current demand.
There may be far more foreclosures in the works when you add filings and defaults from each month. Though most are being snapped up as pre-foreclosures before they become REO, due to the high amounts of equity in the market. Of course, banks may also see taking back properties as being attractive and profitable.
More Foreclosures Are Coming
One reason for such a large percentage spike in foreclosure activity is that the legal process is just recovering from moratoriums and shut downs.
With around just 1 out of every 2,500 housing units receiving a foreclosure notice in Jacksonville and Orlando, FL in February, the market seems much healthier than in 2008. When it wasn’t uncommon to see the foreclosure rate 5-6 times as high.
However, there are a variety of factors which could produce even more foreclosures, and motivated seller deals in the near future.
Opendoor has estimated it is holding $6B in unsold properties. That follows Zillow’s failure, with around 7,000 properties to unload. That could be added to with the failure of other big iBuyers like Offerpad.
Then there is inflation, which is cramping consumer finances. Even aside from groceries and gas, there are large hikes happening in taxes and insurance. Many will see jumps in property tax bills. Some condo and townhome owners are seeing their HOA dues jump by 300% to 400%.
Seeing The Opportunities
With such great end demand for real estate, investors will find any more distressed and motivated seller inventory very attractive. With the potential for better value deals, and more volume.
This doesn’t just have to be residential either. Some of the biggest wholesale deals we’ve seen recently are office buildings. Retail and mixed use could be areas to explore as well.
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