It looks like we will be having quite a few more foreclosures coming on the market over the next few years in the Shakopee real estate market. What banks and MN realtors are calling “shadow inventory” of bank owned properties are those homes that are in the midst of foreclosure and are at some point of the foreclosure process. With the amount of current homeowners currently late on payments and in default it will take nearly three years to clear at the current sales rate, according to a report from the credit rating agency Standard & Poor’s.
It has been said more and more lenders are trying to mitigate the amount of foreclosed properties by taking on more short sale scenarios and loan modification, however i have not seen that process get much better and from what I hear 2011 will be the biggest year of foreclosures to date. At the end of March it sounds as though there will be an influx of Fannie Mae owned properties coming on the market that will be eligible for the “Home Path” financing in which buyer can purchase with a lower downpayment, 3% vs the 3.5% FHA minimum downpayment and these homes will also require no appraisal saving buyers an additional $350-500.
As for the total amount of homes in the “shadow inventory”, an article from housing wire states that Amherst Securities places the total at 7m. The Royal Bank of Scotland found 2.7m, and First American CoreLogic counted 1.7m. Those are some HUGE numbers nationwide! The Shakopee real estate market along with other homes for sale in Minnesot are a sure to see more inventory coming to the market.