Here’s an interesting piece from the San Francisco Chronicle reporting on a “shadow inventory” of foreclosed houses — possibly 600,000 nationwide — that have not been placed on the market.
Lenders nationwide are sitting on hundreds of thousands of foreclosed homes that they have not resold or listed for sale, according to numerous data sources. And foreclosures, which banks unload at fire-sale prices, are a major factor driving home values down.
Is this a way of controlling market prices? With so many high-impact community development initiatives being implemented as a means to stabilize communities hit hard by high foreclosure rates, how do we read statements like those from Rick Sharga, vice president of RealtyTrac, who says that “it could be disastrous if the banks suddenly flooded the market with those distressed properties. You’d have further depreciation and carnage.”
Isn’t there opportunity here? Are the banks simply dealing with unprecedented volume? Let’s weigh in.