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Beatrice and Bibi's Blog

By Beatrice and Bibi | Agent in 34684

2011 Foreclosure Forecast

All indicators point to 2011 being a record setting year in foreclosure activity.  The economy, unemployment, and a large shadow inventory of foreclosed homes not even on the market yet are all leading factors to 2011’s anticipated record-breaking foreclosure outcome.  2010 within itself was a record-breaking year in foreclosure activity, where 2.9 million U.S. properties saw a foreclosure filing.  One in every 45 U.S. households received a foreclosure filing in 2010.

The 2011 is expected to reach 3 to 3.1 million foreclosure filings for U.S. properties.  To add more bad news to a grim prospect for 2011, the foreclosure moratorium in late 2010 has been lifted in most states and foreclosures resumed in January 2011.   These foreclosures will be processed in 2011 now.

In 2010, Nevada, Arizona, and Florida rounded out the top three states with the  highest foreclosure levels.  Followed by, California, Utah, Georgia, Michigan, Idaho, Illinois, & Colorado to make the top 10 foreclosure states.   2011, appears to be the year where foreclosure activity will hit an all-time high again and the top 10 states will remain the same.  However, it is expected that foreclosure activity levels off in 2011 and begins to drop in 2012, 2013.

The two variables with the most significant impact on the rebound of the residential real estate market are unemployment and the economy.  Although, the economy is seeing positive growth, the unemployment numbers still remain at 9%+ in February 2011.  A jobless recovery will keep real wages down, limit promotion/salary opportunities, and make it more difficult for the workforce to keep their homes if other factors in the economy shift.  Higher food and gas prices can have a significant impact to households whom are on the borderline of their current housing affordability.

For homeowners wishing to sell their properties in 2011 values can be expected not to increase and continue to remain flat at their 2010 levels.  However, the real estate market has shown some signs for improvement in certain areas, these are typically regulated to unique areas with limited housing inventories and strong demand.   Property values will remain depressed at 2010 levels.

The banks are also looking at the same data and expecting foreclosure activity to remain constant through 2011.  Additionally, more banks will continue to accept short sales as an alternative to taking properties directly into foreclosure and repossession.  Expect 2011 short sale activity levels to be much the same as 2010, accounting for roughly 25% to 29% of all foreclosure sales.

Comments

By Timothy M. Garrity,  Wed Jul 13 2011, 11:13
Those are some crazy numbers.

Thanks for the info.

TG
By Beatrice and Bibi,  Thu Jul 14 2011, 10:57
They sure are Timothy! I just read on CNNMoney.com that the processing delays brought on by the robo-signing scandal is pushing foreclosures further out and it's estimated that as many as 1 Million foreclosure actions that should have taken place in 2011 will now happen in 2012 or later.

Even scarier is the prediction that instead of the housing market returning to somewhat normal condition by 2014, we're looking at 2015 or even 2016!!!

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