Residential Supply and Demand

REO Inventory Update

Posted on Tuesday, May 18, 2010

REO inventories are expected to to grow over the next couple of years, as foreclosure alternatives are exhausted. According to Barclays as of 2/10, there were 480,000 REOs and REOs are predicted to peak 1/12 at 536,000.

Even if HAMP and other programs dont end up keeping folks in their homes they are at least preventing a flood of foreclosures all at once. Others may say this merely prolongs the pain.

About 5.5 million mortgages are seriously delinquent or already in some stage of foreclosure. Barclays expects 1.6 million distressed home sales this year and another 1.6 million in 2011, then 1.5 million in 2012.
Thats about 30% of all sales for 2010 and would account for about 6 % of all sales.

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