Surplus of Foreclosed Homes Still Exists – Waiting for Buyers

by Simon Lindsay on Foreclosures

It’s no surprise that the foreclosure market is still going on strong these days, with more foreclosures being added at an artificially-slower rate every month. This has created a surplus of foreclosed homes, which is good news for two different groups of people – investors and homebuyers.

A glut of foreclosed homes means that prices are being driven down because of the abundance of supply. If you remember from your high school economics class (which may be harder for some of us than others), an excess of supply lowers prices because supply outstrips demand.

This means that investors and homebuyers alike who are looking for a good home at an affordable price do not have to look very far. Virtually every major market in the country has loads of foreclosed homes on the shelves – some of which have been on the books for months, if not longer. The buyers’ market that we’ve had for the past few years will seemingly only grow as we move through 2011, especially considering over a million homes are in the foreclosure process at the moment.

Contributing to the housing surplus is weak demand in the housing market as a whole, not just with foreclosures. Housing starts and existing home sales are still well below pre-2007 numbers, with nothing to indicate that they will improve over the next year. This just means that buyers and real estate investors have more options to pursue for finding the right home at the right price.

If you’re looking to buy, the time may be sooner than you think – if it’s not already here. Depending on your market, it may be. Look for buying opportunities galore and find the perfect home for your needs.