October 24, 2012
Banks owned about 4,452 foreclosed Oregon properties in June, according to numbers released by the Federal Reserve Bank of New York, but that number is likely to decline — by nearly half, if current trends continue — by the end of next year.
A smaller bank-owned inventory would be good news for the real estate market generally. Some investors and brokers have long been spooked by the prospect of a “shadow inventory” of foreclosures flooding the market and driving down prices.
But that inventory has been shrinking, and if trends continue, it could be cut by 45 percent by December 2013. If trends stabilize, the New York Fed says shadow inventory would fall by 32 percent. And trends reverse course, the inventory could actually increase by 4.9 percent.
The bad news is that the decline is based on homes spending more time in serious delinquency before being foreclosed. In June, homes were spending an average of just over two years in delinquency, and the biggest decline in bank-owned properties depend on time in delinquency rising to more than three years.
Even under the most optimistic scenarios, in which bank-owned inventory is projected to decline in most states, some would see their supply grow. In New York state, the number (2,557 properties) would more than double.
The New York Fed also reports Oregon has 1 percent of all bank-owned properties in the nation. The state’s foreclosures represent 0.61 percent of all mortgaged properties.
Click here to read the article on Oregon Live