USA Today: Foreclosure backlogs could take decades to clear out

[Slimprofits]

http://www.usatoday.com/money/econom...ine/51126600/1

data via: http://www.lpsvcs.com/Divisions/Appl...s/default.aspx

Clogged foreclosure pipelines

Time it would take to clear the supply of homes in foreclosure or have seriously delinquent mortgages at the current rate of foreclosure sales:
	Pipeline Ratio
New York	57
Washington, D.C.	57
New Jersey	52
Maryland	21
Connecticut	20
Vermont	18
Maine	16
Illinois	10
Hawaii	10
North Dakota	9
Pennsylvania	9
Florida	8
South Carolina	8
North Carolina	7
Kentucky	7
New Mexico	6
Indiana	6
Massachussetts	6
Delaware	5
Ohio	5
Mississippi	5
South Dakota	5
Arkansas	5
Oregon	4
Washington	4
Iowa	4
Tennessee	4
Texas	4
Lousiana	4
Rhode Island	3
Wisconsin	3
Oklahoma	3
Virginia	3
West Virginia	3
New Hampshire	3
Utah	3
California	3
Alabama	3
Nebraska	3
Alaska	3
Kansas	3
Missouri	2
Colorado	2
Georgia	2
Montana	2
Indiana	2
Michigan	2
Minnesota	2
Nevada	2
Wyoming	1
Arizona	1
Note: Rounded to the whole year. Source: LPS Analytics

[aaron]

Re: USA Today: Foreclosure backlogs could take decades to clear out

This is the "bailout for the people". There is no good reason to pay your mortgage at this point if you are under water. You can live rent free for a long time before you are kicked out of the bank's house. This frees up a lot of cash to keep the economy going.

5 million people not paying their mortgage times $1500 dollars per month equals $7.5 billion dollars per month of high velocity money. If another 5 or 10 million people figure out this great deal, we might actually get some good stimulus.

The only downside is Aaron will not be able to afford a house for many years to come.

[don]

Re: USA Today: Foreclosure backlogs could take decades to clear out

You're right, Aaron. The key is rate of clearance. If the bank's weren't allowed to hold on to their Shadow Inventory, courtesy of ZIRP, housing would become plentiful and affordable, with a new beginning. You could then start in on maintenance

[sishya]

Re: USA Today: Foreclosure backlogs could take decades to clear out

How much lower can a house go ? I don't think much. also interest rates are at lifetime deals.
buying a Home now is a good deal before real inflation kicks in.

[don]

Re: USA Today: Foreclosure backlogs could take decades to clear out

How much lower can a house go ? I don't think much. also interest rates are at lifetime deals.
buying a Home now is a good deal before real inflation kicks in.

Are you in the business?

[CanuckinTX]

Re: USA Today: Foreclosure backlogs could take decades to clear out

How much lower can a house go ? I don't think much. also interest rates are at lifetime deals.
buying a Home now is a good deal before real inflation kicks in.

Sure, prices can't possibly fall ANY farther can they? Interest rates certainly can't go much if any lower but that means if they DO go up again watch prices collapse even farther.

You need to read this Dr. Housing Bubble's post to realize that inflation isn't going to be the cure for housing woes either. (IIRC EJ has posted something similar on here, but this article was much quicker to link)

http://www.doctorhousingbubble.com/h...ent-deflation/

[aaron]

Re: USA Today: Foreclosure backlogs could take decades to clear out

When "real" inflation kicks in, more people will not be able to afford their mortgage. They will not have money to pay for their McMansion after they pay for food on their table or gas in their car. If anything, with higher inflation we should see an increase in supply of housing as people trade down and buyers have less money.


Also, what will happen when baby boomers give up on the "recovery" and realize they can live well in Florida for half the cost? I think they will sell their homes.

Let's not forget that taxes are going up as well. Housing will have to drop to make up the difference.

I think we will see low interest rates for a long time to come.

I'd like to see another 50% drop before I would call anything around here a great deal. I understand other areas have fallen a lot more, however.

[jpatter666]

Re: USA Today: Foreclosure backlogs could take decades to clear out

When "real" inflation kicks in, more people will not be able to afford their mortgage. They will not have money to pay for their McMansion after they pay for food on their table or gas in their car. If anything, with higher inflation we should see an increase in supply of housing as people trade down and buyers have less money.


Also, what will happen when baby boomers give up on the "recovery" and realize they can live well in Florida for half the cost? I think they will sell their homes.

Let's not forget that taxes are going up as well. Housing will have to drop to make up the difference.

I think we will see low interest rates for a long time to come.

I'd like to see another 50% drop before I would call anything around here a great deal. I understand other areas have fallen a lot more, however.

Lots of people would love to sell but can't -- they'd have to bring money to the table.