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Tue May 22, 2012
Third-party investors are much faster at reselling foreclosures than banks, according to ForeclosureRadar, a California-based tracking firm.
ForeclosureRadar keeps close tabs on foreclosure activity in states along the country’s western seaboard, and the company says one market dynamic that it’s found to be consistent throughout the area is that investors are moving foreclosed homes at a more rapid pace than lenders who take possession of REOs.
In Oregon banks take an average 156 days longer to sell foreclosed inventory than third-parties, according to ForeclosureRadar’s report.
California banks on average take 104 days longer to dispose of REOs than third-party investors do to resell their distressed assets.
Arizona and Nevada banks both take an average of 70 days longer to move inventory than investors, while in Washington the resell timeline is 52 days more for banks.
Looking at ForeclosureRadar’s historical data, the resell timelines for investors and banks were separated by fewer than 8 days as recently as February in Washington and Oregon, and fewer than 20 days in Arizona and Nevada as recently as January.
In California the disparity between the two disposition channels has been 70-plus days, going back at least a year.
“Our statistics clearly show that real estate investors continue to far outperform banks in dealing with distressed properties,” said Sean O’Toole, CEO and founder of ForeclosureRadar.
Armed with this information, O’Toole takes issue with the government’s recent push to turn foreclosed homes into rental properties.
“[P]oliticians and bureaucrats are putting pressure on banks to become landlords, which will hurt local economic activity, as fewer properties are made available to local investors,” he said.
O’Toole expects the foreclosure rental strategy to also take its toll on the businesses of real estate agents, contractors, and property managers, as well as homebuyers in need of affordable housing.
ForeclosureRadar’s report also showed that foreclosure filings decreased throughout the company’s five-state coverage area, continuing a trend seen over the course of several months.
Activity on the courthouse steps was down from a month ago everywhere except in Washington where foreclosure sales to third-parties rose 44 percent.
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