Tax Lien Properties for Sale and REOs Still High in Colorado

by on Foreclosures

The supply of foreclosed tax lien properties for sale and real estate owned properties in Colorado is still high, housing analysts have stated. They claimed that aside from the already listed distressed properties, there is also a huge number of real estate owned properties or REOs that have yet to enter the market.

These distressed properties that have not been declared yet as foreclosures for sale in Denver or in any other areas of the state comprise the so-called shadow inventory of the state. Housing experts revealed that the shadow inventory in the region of Northern Colorado is mostly made up of REOs or properties that failed to sell at auction and are currently in banks' books.

These unlisted bank foreclosures in Colorado, experts further stated, can flood the real estate market at any given time and depress property prices further. Some real estate analysts have estimated that bank owned properties in Northern Colorado alone are worth around $15 million. Most of these properties are reportedly empty, particularly in small towns like Milliken and Johnstown. Analysts are expecting these unlisted REOs to enter the market once consumer confidence improves and the housing market picks up pace.

On top of the already existing foreclosure tax lien properties for sale and distressed homes in the market, the entry of these thousands of properties will likely hinder the recovery of the housing market, analysts further added. Meanwhile, some local banks have admitted that most of them have more real estate than they would have liked, but they also added that they try to minimize the effect on the market of the release of these properties.

Although bank home foreclosures in the nation's shadow inventory have diminished a bit in the past few months, analysts stated that the level is still elevated. As of January of this year, around 1.8 million real estate units are reportedly under the country's shadow inventory. The total will take around nine months to sell based on the current pace of house selling, analysts revealed. U.S. regions with the highest level of shadow inventory are New Jersey, Maryland and Illinois, analysts also reported.

With the current level of bank foreclosures and foreclosed tax lien properties for sale this high, analysts are predicting that the distressed property supply will take a long time to unload. They added that this will mean that prices of homes are likely to continue to decline for several more months.