Almost one in four homes (24%) sold in Q2 was a foreclosed property according to a new report from RealtyTrac. It sounds enormous, and is, given that the average percentage during normal times might be something more like 5%.
Yet we should actually be hoping that even more foreclosed properties are sold says the firm, since each foreclosed home sold reduces an overhang of distressed properties. At this rate, there’s still more than two years of distressed inventory which needs to be sold:
“This is the kind of volume of activity that we need to see for the market to heal,” RealtyTrac senior vice president Rick Sharga said in an interview.
“Our projections have been that we will get through the distressed inventory largely by the end of 2013, and these kinds of numbers are on target to get us there,” he said.
“Ironically, the higher the percentage of homes that are sold that are distressed properties, and the bigger the number, the quicker we’ll get through this housing downturn,” said Sharga.
No worries. Another round of quantitative easing from the Fed is coming, and it could easily drive interest rates, including mortgage rates, far, far lower, thus making homes even easier to buy.