The average loan in foreclosure has been in delinquency for 631 days - How will this affect Home Sales Prices?

The average loan in foreclosure has been in delinquency for 631 days - How will this affect Home Sales Prices?

If you stop paying your mortgage, chances are, you’ve got nearly two years before you’re forced to find other lodgings according to a recent mortgage report. The reports says that the average homeowner will go into default on average 631 days before getting foreclosed on. The increased days is resulting in more "Shadow Inventory."

The foreclosure process is similar to a community college. Few student who start at a community college finish. The foreclosure process, according from data-tracker LPS Applied Analytics, shows that the average loan in foreclosure has been in delinquency for 631 days. Wow . . . that is a long time. Nearly 21 months. 

The lag is the processing of foreclosures is being blamed on the increased time to negotiate a short sale and the "robo-signing" scandal. Mortgage lenders have been dotting their "I's" and crossing their "T's", thus delaying the foreclosure process. 

So what does this mean for Kansas City home prices?

Home sales prices in Johnson County, Kansas are 20+% below what they were 1 year ago today. Other areas like Miami and Wyandotte County are seeing similar home sales price declines. In addition to decreased sales prices, areas like Mission, Overland Park and Leawood which have been mildly immuned to high number of foreclosures, have seen a higher number of foreclosures the past 90 days.

Different areas in Kansas City maybe faring differently, depending on the median home price, the local economy, and which state. Kansas and Missouri handle foreclosures differently and I'm not up-to-date on the Missouri foreclosure and real estate stats today.

  There are some reasonable deals, but not all foreclosures are bargains.  As always, “Let’s be careful out there”.

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Blog post written by the Dowell Taggart Team of RE/MAX Premier Realty 

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