REO Sales To Set More Records In 2009
REO Sales To Set More Records In 2009 Why the Foreclosure Market Will Continue to Soar
Countrywide Financial regularly updates an online chart showing how the numbers are trending on its REO properties. Back in August, that chart looked like this:
A total of 15,108 REO Listings with a total asking price of $2,707,749,339 (yes, that's over two billion dollars of REO homes).
That REO chart was updated in January this year, and it looked like this:
A total of 20,255, a 25% rise in REO listings in five months - with a total asking price of $3,270,467,911. Over 3 billion dollars. And again, this is only from one mortgage company.
That kind of amazing increase in REO properties is a big reason why most experts think REO agents and brokers are going to be busier than ever in 2009. With the biggest number of defaults and foreclosure filings in US history projected for this year, the REO specialist is going to have his hands incredibly full.
In 2008, almost one hundred and fifty million dollars worth of BPOs (Broker Price Opinions) needed to be completed on REO listings. That's an incredible amount.
When we move to actual REO sales totals from last year, the numbers are even more astounding. Statistics show that REO closings grossed over 12 billion dollars in 2008. So how much did of that 12 billion made its way to REO Agents?
One estimate, taking into account expenses and overhead, puts the broker compensation at $185 million. Yes, there was one business that went through the roof last year.
One of the factors driving the rising number of foreclosures and REO properties is most economists' predictions that home prices will decline through 2009 and not bottom out until late in the year or early 2010 at the earliest.
Mark Fleming, chief economist of the Real Estate data firm First American CoreLogic, says that even in the most optimistic scenario, if a government stimulus package took immediate effect and completely stopped home prices from plummeting, the real estate market would still need at the very least a year to start showing any signs of recovery.
"We'll have to work our way out," Fleming also commented. "Home prices are not like Lamborghinis; they don't stop on a dime. They're more like trucks."
Falling home prices means more negative equity for homeowners - and rising unemployment figures mean more potential defaults and foreclosures. The perfect economic storm has hit - and it's going to take quite some time to put all the pieces back together.
About the Author:
Frank Patrick is the founder of ASREOS. ASREOS (the American Society of REO Specialists) is the first professional association for REO Agents created by REO professionals and contains numerous resources and tools to maximize REO opportunities and find REO listings - as well as the ability to interface with other REO Agents across the country in an exclusive forum. Find out more about ASREOS and what it has to offer at www.asreos.com .
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