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The unintended consequences of (the forthcoming) foreclosures

The consequences

4515232151_1c8d252e34_mThe likelihood of an influx of bank owned (REO) and previously unsold foreclosed homes about to enter the nation’s real estate market in the coming months is all too real.

Although the numbers remain a mystery, one thing is almost a guarantee… this will impact just about every homeowner from Portland, Oregon to Portland, Maine and all points in between. I’m not talking about home values declining further or even talking about the housing market as a whole becoming more unstable.

Nope, what I’m talking about is the collateral damage that will almost certainly occur and the unintended consequences to the good, hard working homeowners who’ve paid their mortgage and have lived up to their promises of being a good neighbor.

A shift in focus?

Clearly the focus to date has been on those who’ve lost their homes over the last few years…but little has been mentioned about what the impact will be on the homeowners in good standing living in these neighborhoods and communities that are baring the brunt of these foreclosures? Lost in the minutia of all this doom and gloom, there are still actual homeowners that have made their payments and still want to see their beloved community maintained. When these homes finally do sell for pennies on the dollar, who do you think will eventually own these properties?

  • First time home buyers? With rates and down payment requirements keeping many out of this arena…I’m inclined to think not!
  • Investors? Certainly these folks who are buying these homes can only live in one at a time which means they will be renting most of them out. Certainly not an enticing thought or what the current homeowners want to see, I bet!
  • Second home buyers? Maybe, but tight lending regs rule out most folks owning 2 homes unless you have a gold-plated credit score.
  • Move-up or Move-down buyers? Again, maybe…but these folks likely need to sell before they can buy.

Who do you think will be the players in this foreclosure free-for-all? Certainly leaves a great deal to the imagination…especially if you live in one of these neighborhoods or communities.

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Written By

Patrick Flynn is a 13 year Veteran of this Real Estate fray and a blogger on mySeattleblogs and is active in various social networks. Like many writers at Agent Genius, Patrick wears a few hats other than a Broker's lid- he is also a Certified Real Estate Instructor for the State of Washington and has enjoyed delivering 1,000+ hours of clock hour and non-clock hour approved courses in his career. Patrick has also been a Designated Broker since 2003 and revels in being able to coach and mentor fellow real estate professionals.

13 Comments

13 Comments

  1. stealthreinvestor

    April 13, 2010 at 9:49 am

    The unintended consequences of (the forthcoming) foreclosures https://bit.ly/d2bGjB

  2. Century 21

    April 13, 2010 at 4:04 pm

    The unintended consequences of (the forthcoming) foreclosures https://bit.ly/9DtK1X (@agentgenius)

  3. Joe Pastori

    April 13, 2010 at 4:10 pm

    RT @C21RealEstate: The unintended consequences of (the forthcoming) foreclosures https://bit.ly/9DtK1X (@agentgenius)

  4. topsy_top20k_en

    April 13, 2010 at 6:23 pm

    The Unintended Consequences’ of (the Forthcoming) Foreclosures.: The likelihood of an influx of bank owned (REO) a… https://bit.ly/9LhS9V

  5. United Country

    April 13, 2010 at 8:55 pm

    Will the wave of foreclosures heading into the market present unintended consequences? @agentgenius thinks so: https://ow.ly/1xSdG

  6. anthonys indianapolis homes for sale

    April 18, 2010 at 2:28 pm

    The question is, how large is this shadow inventory? Regardless, there can be no doubt that any swell in inventory can only make things worse, at least in the short term. On the upside, the market WILL eventually absorb the inventory. Real estate is a finite resource, and the population is still growing, The market will correct itself; it’s only a matter of how many people will have to suffer in the interim.

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