A recent article from the National Association of Realtor’s magazine, REALTORMag, reported that foreclosures across the country were down 29 percent compared to the same period one year ago.

(1) From May 2012 to May 2013, homes in sinvesting in foreclosuresome state of foreclosure fell from 1.4 million homes to 1 million homes in May of this year, representing the 29 percent decline. For May 2013, there were 52,000 foreclosures completed nationally, down 27 percent.

As real estate investors acquire these distressed properties, they are slowly gradually reducing the foreclosure inventory and as inventory declines, the prices will naturally rise. In fact, according to the article, the current inventory of homes is down 34 percent from the highest level in 2010. As of April 2013, there were just fewer than 2 million foreclosed units available, adjusted to just over five months of inventory.

So what’s the trend? The data suggests that fewer distressed properties will be available in the future as foreclosure filings have declined. This is a natural occurrence as the economy is gradually improving albeit at a slothful pace. The only thing that could reverse this trend is for the unemployment rate to rise starting a new wave of delinquent mortgage payments.

These numbers reflect national trends and certain areas were impacted more than others during the housing crisis and yes, all real estate is local but the decline can’t go unnoticed. A shrinking inventory will increase the price of foreclosed property, this can in turn increase the price of rehabilitated homes as investors will ask for and get the prices they need.

However, this trend will affect the individual real estate investor more than others. For those that dabble in and dabble out of foreclosed homes, they’ll soon leave the market. Any real estate market offers opportunities for investors and without the skills it takes to identify those opportunities, many will leave the foreclosure investing game altogether. It just makes sense that a company that concentrates solely on acquiring, rehabilitate and selling or renting real estate as a business will dominate any foreclosure market, regardless of trends.

  1. Realtormag.realtor.org  July 10, 2013