US Struggles as Biggest Seller of Homes in Buyers' Market
Aug. 26 (Bloomberg) -- For sale or rent by motivated owner: 248,000 foreclosed homes.
The U.S. government, which has become the nation’s biggest owner of residential properties, is looking for ways to reduce and manage its huge inventory without swamping the real estate market or exposing federal agencies to enormous losses.
Government-run Fannie Mae, Freddie Mac and the Federal Housing Administration now own about a third of the country’s nearly 800,000 foreclosed properties. With that inventory predicted to grow, they are looking for new ways to cope.
In a joint public appeal this month, the agencies invited the public to send in suggestions for managing the inventory, particularly ideas for turning foreclosed homes into rentals.
Karen Petrou, managing partner of Federal Financial Analytics Inc., said the unusual appeal is a sign the agencies recognize the backlog of distressed properties has grown so large that it can’t be sold off without inundating the market and depressing prices.
“They’re stuck,” said Petrou. “All sorts of people are demanding they do something. They don’t know what to do but they have to do something.”
The government’s housing inventory is just one challenge facing President Barack Obama as he prepares to run for re- election next year. The administration also is exploring ways to help hard-hit neighborhoods, unemployed homeowners and underwater borrowers whose houses are worth less than what they owe -- many of them concentrated in battleground states including Florida, Ohio and Nevada.
Refinancing
Current low interest rates offer an opportunity, with 30- year-fixed loans hovering just above 4 percent. The administration is weighing ways to allow distressed or underwater borrowers to refinance into a lower-rate mortgage, freeing up billions of dollars to boost consumer spending.
Housing Inventory California Month February - News
With about 50000 REOs sold each month, the market has a 15-month supply, the firm said. Buffering the broader housing market from a glut of government-owned inventory by turning them into rentals might be good for homeowners and the economy.
Bank of America, JP Morgan, Fannie Mae, and Wells Fargo are all experimenting with home demolition as a way to reduce their foreclosed home inventory -- as Warren Buffett suggested over a year ago.
California, Nevada and Florida are always on those lists because homes are vacant and home values continue to drop. But the three are not on this list. It may be that prices have dropped so low in these markets that home inventory has begun to move,
"When we look at the inventory numbers for California, we still see a 10-month supply of foreclosed and bank-owned inventory that hasn't sold yet," he said. "We think the numbers will remain high for another year and start to taper off at that point.
A Fidelity employee in California referred questions to Wells Fargo, whose spokespeople declined to comment. Kelly D. Sutherland, the law firm's managing partner, also declined comment. Laxson, 50, bought her three-bedroom home for $206000 in 2005.
US Struggles as Biggest Seller of Homes in Buyers' Market | Listed.me
Aug. 26 (Bloomberg) — For sale or rent by motivated owner: 248,000 foreclosed homes.
The U.S. government, which has become the nation’s biggest owner of residential properties, is looking for ways to reduce and manage its huge inventory without swamping the real estate market or exposing federal agencies to enormous losses.
Government-run Fannie Mae, Freddie Mac and the Federal Housing Administration now own about a third of the country’s nearly 800,000 foreclosed properties. With that inventory predicted to grow, they are looking for new ways to cope.
In a joint public appeal this month, the agencies invited the public to send in suggestions for managing the inventory, particularly ideas for turning foreclosed homes into rentals.
Karen Petrou, managing partner of Federal Financial Analytics Inc., said the unusual appeal is a sign the agencies recognize the backlog of distressed properties has grown so large that it can’t be sold off without inundating the market and depressing prices.
“They’re stuck,” said Petrou. “All sorts of people are demanding they do something. They don’t know what to do but they have to do something.”
The government’s housing inventory is just one challenge facing President Barack Obama as he prepares to run for re- election next year. The administration also is exploring ways to help hard-hit neighborhoods, unemployed homeowners and underwater borrowers whose houses are worth less than what they owe — many of them concentrated in battleground states including Florida, Ohio and Nevada.
Refinancing
Current low interest rates offer an opportunity, with 30- year-fixed loans hovering just above 4 percent. The administration is weighing ways to allow distressed or underwater borrowers to refinance into a lower-rate mortgage, freeing up billions of dollars to boost consumer spending.
Housing Inventory California Month February - Bookshelf
February
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