No one really knows how many houses are owned by banks. Banks often buy homes in foreclosure to limit losses, hoping that they’ll be able to turn the house around for a profit later. But after months and months of foreclosures, banks may now be preparing to sell the houses they’ve been buying. Anecdotal evidence from Las Vegas, one of the foreclosure capitals of the US, suggests that we’re about to see a release of bank-owned home inventory into the market.
With sales at their highest level since June 2006 and first-time homebuyers and investors gobbling up inventory, it has raised the question of whether lenders will flood the market with a backlog of foreclosures.
Some analysts have suggested that banks may have as many as 25,000 homes in foreclosure inventory that they have been holding back to prevent prices from dropping too far.
Dennis Smith, president of Home Builders Research, says the inventory of existing homes continues to be a hot topic. He says that if you supplement the Multiple Listing Service data with daily anecdotal information that comes from Realtors, it appears the inventory of existing homes has reached the point where major banks will soon start releasing some of their foreclosure properties that they have been holding back.
That could mean thousands of homes that banks will want to clear from their books, Smith says.
“Realtors who specialize in foreclosures and bank-owned properties are certainly gearing up for a flood of listings during the upcoming weeks,” Smith says.