For those real estate investors who fear that the best deals in foreclosures have come and gone, there are plenty more on the way.    According to a report from RealtyTrac, bank repossessions rose by 11% last month.  That rate was 29% lower than May of last year, however.

Default notices and scheduled auction have also increased.  Among the leading states, bank repossessions were up in 33 states, with North Carolina the highest, with a 60%;  then Oregon with a 59% jump; Wisconsin at 44%; a surge of 44% in Illinois; then Colorado with 23%; and Michigan with a 19% hike.

For those states reporting the biggest increases in foreclosure starts from last May to last month, Maryland was up 229%; Connecticut jumped 122%; Hawaii more than doubled at 108%; Arkansas was higher at 84%; New Jersey increased by 82%; Nevada rose by 81%; Washington increased by one than half to 53%; Pennsylvania was up by 26%; and there was a 13% rise in New York.

There are many factors cited for this increase, even the housing market is much stronger and the US economy continues to improve.

With the housing market improving, it is a good time to move all inventory on the market, including foreclosures.  Interest rates are still low and the number of real estate investors looking to buy is high.  That makes it a better time to try to unload any real estate being held back, including foreclosures.

In the United States, there are more than one million homes in some stage of foreclosure.  There are plenty more that would be entering foreclosure if the note holder felt that the property would fetch a good price.  With real estate prices rising, there should be more houses entering foreclosure.

This is good for the real estate market that the "shadow inventory" for foreclosed homes is starting to decline.  For the real estate market to be fully healthy and recovered, prices must be reset with all inventory on the market.  When that happens, market demand can then set the price for a property.  Until that transpires, there is always an overhang that results in a false read, which creates uncertainty in a market.  When the conditions for any asset class are not stable, fewer investors will commit.

Institutional investors have bought large numbers of foreclosed homes in the United States.  Rather than attempt to flip properties for a quick profit, the new owners such as hedge funds and private equity groups are renting them out.  In a low interest rate environment that provides a better yield than that from a Treasury Bond or a dividend-paying stock.

The history of rising rents in the United States also provides a hedge against the stock and bond markets falling again.  During The Great Recession, stock and bond prices plunged in the United States and around the world.  But the level of rental income in the United States actually rose over that period.  Historically, rents increase about 5% yearly in the United States.

"The sooner the foreclosure crisis is over, the better for the American real estate market," observed Jerry Cohen, Founder and President of EquityBuild, a real estate investment firm.  Cohen, who has been a principal in more than two thousand real estate transactions since 1984 of which many were foreclosures, furthered that, "It is tragic that a foreclosure has to happen.  But the event to turn that situation into a positive happening is to have the house sell again quickly to a new owner or investor.  When that takes place, a vacant house on a block becomes someone's new home.  That is the best thing for all parties involved, from the new owner to the neighborhood with a house showing that special 'pride of ownership'  again that results in higher real estate prices."

                                                                                                                             -30-