Short Sale Summer and Foreclosure Fall..

The evidence is there, the first wave of Foreclosures came to those with predatory lenders offering adjustable rate loans. This new wave happening now is coupled with job loss. Meaning that we will see more foreclosures in the suburban markets then the Urban markets this summer.

For the most part the core city foreclosures have run there course, but this new wave is all about the middle class worker who lost their jobs in the last year. Some will be those homeowners that will forgo good credit and short sale or foreclose. The main issue for those who choose to short sale or foreclose is because they are underwater with the value of their home. Some may not see the values, equity or a tipping point for two to three years. I say that's OK, wait! If you make it through these tough times, your value will return.

Some folks don't want to wait for that tipping point, because there are conditioned to 5,6,12% year over year equity gains. However, those type of equity gains are gone and we are headed back to a 2 or 3% year over year equity gain in the years to come.

Housing Link's recent report on foreclosures shows the spike in foreclosure reporting, and sheriff sales. Every county is seeing a spike in foreclosures and that trend will continue. The only possible silver lining, that is not really a silver linning, is if the banks can better streamline short sales. Streamlining that process will reduce the foreclosures in the short term, but in the long term the lasting impact of the last two years hurts us all. Is this the bottom of the market? After this wave I think it is bottom market, but what will prices look like when we are there??

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