By Wendy Cole, Senior Editor, REALTOR® Magazine
Foreclosure filings have decreased slightly for the past three months in a row, according to RealtyTrac. While that’s certainly welcome news from a short-term perspective, the larger picture concerning distressed properties remains grim. October 2009 marked the 45th straight month of year-over-year increases in foreclosure activity. In the third quarter of this year alone, there were still more foreclosures than in all of 2006.
At the RISMedia Power Broker Perspective Panel on Distressed Properties, RealtyTrac’s Rick Sharga noted that the year will end with about 3.3 million households having gone into foreclosure. And because of rising “shadow inventory” another 4 million properties are expected to hit foreclosure status in 2010.
The Obama Administration’s recent push to accelerate the pace of loan modifications to keep struggling borrowers in their homes also has a dark side. Some 50-60% of those whose loans are modified are expected to redefault eventually nonetheless.
This massive inventory of distressed properties continues to put significant downward pressure on home prices nationally, and makes it tempting for real estate practitioners to slip into a state of powerlessness and discouragement. That’s a huge mistake.
Just ask Mark Stark, CEO of the Prudential Americana Group. He could be forgiven for a fair degree of despondency about these seemingly horrific events in the real estate world. He’s based in the foreclosure epicenter of Las Vegas, where homes that a year and a half ago listed for $444,000 are now on the market for $150,000, and still barely moving.
But appearing as RISMedia panelist he was positively evangelical in his remarks to real estate pros about coping with a changed market:
- Don’t label your market. Take “good” and “bad” out of your vocabulary. What’s happening now is an event, and it’s your challenge to be informed, work through the problems and find answers.
- You need to live in the truth. Don’t confuse the facts with what you’d like the facts to be.
- Question your limiting beliefs. Ask yourself tough questions and acknowledge that sometimes you will be wrong.
- Be part of the solutions and the opportunities. There will be more opportunities from this debacle than there were before. A lot of good will come out of this–eventually.