Market Update — Bank Owned inventory, more commonly known as Foreclosure Properties (or sometimes referred to as REO, or ‘real estate owned’ in banking vernacular), has returned to the levels we saw prior to the crash in 2008.
Beginning in 2010, and continuing until roughy 2015, foreclosure (and its cousin, the ‘short sale’) were a significant part of the market. However, as prices have begun to increase, both the number of homes already owned by banks, as well as the number of homes entering foreclosure, have fallen sharply.
Despite the decline in inventory, the public still seeks foreclosed homes in the home that they will be sold at a discount. While foreclosure may offer a discount, the discounts are often small in relation to the risk carried by properties that have undergone the foreclosure process.