For those sellers waiting to put their home on the market until the market improves… well, that timeline appears to be lengthening. And given delays in the time it’s taking lenders to move a home from default to foreclosure and then sell the property, the housing turnaround could conceivably be pushed out to as late as 2016, says Rick Sharga, a senior vice president at RealtyTrac.
“The best-case scenario is we don’t get back to normal levels of foreclosure activity until 2015, which means the housing market recovery gets delayed by at least a year. It could be the new reality is we’re going to have to accept the fact that home prices in most markets aren’t going to budge much for the next several years while this overhang gradually, painfully makes its way into the market and gets purchased.”
RealtyTrac estimates that 1 million foreclosure-related notices that should have been filed by banks this year will be pushed to next year. The filings include notices for defaults, scheduled home auctions and home repossessions.
The delayed filings does buy more time for many borrowers behind in payments to remain in their homes, perhaps giving them time to catch up or simply to stall their inevitable eviction. But it also means any eventual foreclosures will happen next year, extending the shadow of distressed properties that hovers over the market.
In all, some 1.2 million U.S. homes received a foreclosure-related notice in the first six months of this year, RealtyTrac said. Put another way, one in every 111 U.S. households received a foreclosure filing between January and June.