Foreclosures – More Than the Market Can Handle

Thousands of foreclosures in Santa Clara County and San Mateo County are underway, but remain stuck in the middle of the process because comparatively few foreclosed homes are going up for sale compared to the number that are being repossessed by banks. According to experts, the reason for this is because of one of two reasons-either banks are completely swamped with the large numbers or they are controlling the number of homes that are listed for sale to prevent flooding the real estate market all at once. The steady rate at which foreclosures have entered the real estate market suggests that banks are simply setting a more controlled pace rather than feeling overwhelmed.

The time in which it takes banks to foreclose on a home after initially providing homeowners with a notice of default is up 51% from this time last year. Plus, the total number of homes that have been foreclosed and are now for sale is certainly a small percentage compared with the thousands of homes that are trapped in mid-foreclosure. Two to three years ago, the housing bubble burst in East San Jose and foreclosed properties flooded the market. According to Don Orason of the Intero Almaden Office, that could be why banks are choosing to hold off this time on releasing foreclosures into the market. Even since July, the sale of foreclosed houses has dropped. While well-priced homes will still be sold, they are taking longer and therefore spending more time on the market.