In the last few months I have witnessed the REO market dry up to a trickle of properties compared to where it was earlier in the year. Such a drastic change in what was a matter of months was certainly the cause of something artificial and not an accurate reflection of our improving economic situation.
There are many out there that claim the second round of foreclosures is approaching and will be worse than the first. Although I do see an increase in the number of REO’s and defaults in the last few weeks, I’m not sure that we will go through the same spell we did earlier this year. Perhaps that’s more blind optimism than fact, but a lot of factors have improved since last year like our banking system and overall sentiment has improved.
Nonetheless how much of that sentiment can be attributed to the implementation of foreclosure moratoriums and lenders with holding default notices. There is no doubt in my mind that foreclosures will increase in the immediate short run, by how much, well its hard to tell. Will these foreclosures be swallowed up by the increased buyers out there, its possible judging from the current market situation.
In regards to Rivermark we are not immune. We have seen Rivermark inventory get swallowed up in the last few months. What was once a glut of properties for sale is now another tight market where listings are being sold within a week or two. I have noticed however new defaults recorded in Rivermark and trustee sales being announced which can mean only one thing more foreclosures and REOs in the future. With Sun Microsystems also laying off another 3,000 this cannot help the situation. I’m not suggesting dooms day for Rivermark rather a strong likelihood of more short sale and bank owned homes.
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