Too Many Homes on Market Hurt Prices
Source: Fox News - Phoenix
Published : Tuesday, 20 Oct 2009, 10:25 PM MDT
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PHOENIX - Some experts are saying that the housing slump is far from over. They say home prices have not yet hit rock bottom -- by as much as 20 percent. It's because there's too much inventory.
For every "For Sale" sign, there's a handful more nearby that have received a notice of default for its owners being behind on the mortgage.
An aerial map of homes in the Maricopa County is dotted with homes whose owners are behind on their mortgage.
While not all of them will be foreclosed, many will end up on auction or in a short sale.
Realtor Andrew Wheeler says people don't see it coming.
"The banks have been holding back the REO's, and not letting them out of the legal system onto the auction market. Therefore they're just sitting on them. They've been piling up. We are cruising somewhere into 100,000 units," says Wheeler.
"Every house that I look at that is for sale that is bank-owned is surrounded by several numerous trustee sales that are coming up around the corner."
Banks are apparently holding on to homes because an influx of homes coming onto the market could force prices to plummet. Wheeler says that may be a very real risk come next spring.
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