A recent study conducted by Equifax revealed that high real estate shadow inventories are posing real challenges to the ongoing economic recovery.
According to Equifax, financial conditions overall are suggesting stabilization and growth of the U.S. economy but continued instability in the housing market and mortgage marketplace is negatively affecting the overall rate of recovery.
“Shadow inventory” is loosely defined as real estate properties that are currently owned by banks but are not currently for sale. Mortgage delinquencies still exceed pre-recession levels, Equifax said, and high shadow inventory levels are contributing greatly to this continued high rate of delinquency.
“Shadow inventory and real estate owned properties are still playing a dominant role in today’s mortgage market and slowing the pace of economic recovery,” Craig Crabtree, senior vice president and general manager, Equifax Mortgage Services, said in a statement.
Real estate owned (REO) properties currently represent three percent ($21.8 billion) of all first mortgages in the U.S., and Equifax research suggests that many of these REO properties are the result of bankruptcy proceedings.
Lenders are having difficulty unloading REO properties, Equifax said, which is leading to higher REO mortgage rates and continued economic strain.
“While we are seeing stabilization across multiple sectors of lending, there remains a significant volume of delinquent first mortgage loans, which has slowed the foreclosure process,” Crabtree said. “Until these foreclosures are processed, the mortgage market will continue to impact economic growth.”
In essence, now is a good time to sell your property as the “shadow” inventory is still behind lock and key. Once the key is turned, we will see many more properties on the market which will create competition for the sale of your home. So, if you are ready to sell, act now. Call Richard and Kirsten at Powell Fine Homes to see how we can help you realized your real estate goals.
The Truth Behind The Real Estate News 
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