DSNews writer, Carrie Bay published an article today citing Barclays' bank analysts pointing toward a continued drop in pricing around the country, but a slowing of the foreclosure process and eventual bottoming of pricing.
This is a trend we have been seeing in Memphis foreclosures as the number filings slows and inventory reduces. The number of properties in Memphis in pre-foreclosure notice status and behind on payments continues to remain high, but is expected to level off and be reduced over time.
The article also points out that any increase in sales will probably match a decrease in sales price until the excess inventory of discount properties is reduced. This matches another trend in Memphis investing as the recent rise in home sales has also been met with a decline in average sales price.
If you have read earlier blogs by me, you know that there is some concern of a "shadow inventory" hanging over the country. The analysts at Barclays point out that any failure to contain future foreclosures or slides into foreclosure of modified loans could dramatically alter the recovery process and prolong a deflated pricing situation.
For long-term investors whose properties are being paid off by the positive rental income, this is music to our ears. A continued downward trend in pricing means an ample supply of discount investment property to purchase, rehab, rent and manage with a turn-key real estate company. The more property investors are able to purchase today at discount pricing, the quicker the supply dries up and the quicker those properties are rehabilitated and put back into the housing system as rental property.
Here is a link to Carrie Bay's complete article.
I will keep you updated on any future articles that tie into the housing situation here in Memphis, TN.