Is it true, is there actually a 2nd wave of foreclosures coming? I’ve heard about it coming for months but it has yet to arrive. Well it is coming. Some banks are holding back inventory and many foreclosures have yet to go into default. Here is a great article about the next wave of subprime mortgage foreclosures. Here are 4 common questions about this 2nd wave.
1. When is it coming?
Rumor had it was coming in the spring and summer but it is mid September now and yet to arrive. This article here, takes a look and predicts the 2nd wave has started but will not peak until 2011.
2. What are investors to do?
Invest, Invest, Invest some more!! Most people will run for the hills with fear. When people run that means you can get the best deals. Supply vs Demand right? Warren Buffett even says the time to buy is when people are in fear. There will be an oversupply of opportunities and savvy investors will cash in. So all you investors out there, keep on investing in great deals now and position yourself to take full advantage of the 2nd wave.
3. How will this impact the real estate market?
The market has already experienced a drastic correction bringing home values back to more affordable prices. Adding more distressed properties will further reduce home prices and extend the buyer’s market for quite some time. It will be interesting to see the extent of the impact but at the end of the day it comes down to supply vs demand and there will be a large number of properties for sale.
4. How will this impact the economy?
The credit and housing meltdown is at the center of the recession we are facing. Further financial hardship by many home owners, reduction of home values and a large number of foreclosures cannot be good. The worst may be over, but this could easily keep the economy from a quick rebound and maybe cause more of a plateau.