Here’s why I don’t believe we’ll see a ton of foreclosures in our market.
Now that it’s mid-September, we’re six months into the pandemic. This has caused many buyers to decide to wait to enter the real estate market until a wave of foreclosures happens. However, I don’t foresee that taking place here in Nashville. This may happen in other areas of the country, but in our market, we’re experiencing exponential price growth. Demand has stayed consistent, which is driving prices up.
Even if someone bought their home last year, there’s a good chance they could sell it this year and already have equity. With a foreclosure, those owners are completely walking away from the equity they’ve built up. Right now, if a person is behind on their mortgage, they can still sell their house and make money. We’ve helped clients in this exact situation over the past six months.
Also, many of you heard about forbearance, which is when the mortgage companies forgave or delayed payments for a short period. However, every month we’re seeing fewer people in forbearance. In July, the number of mortgage holders in forbearance was down to 5.6%, which was down from almost 10% earlier in the health crisis.
Right now, if a person is behind on their mortgage, they can still sell their house and make money.
So, in our market, I don’t see a great opportunity coming if you’re waiting for foreclosures because there are only going to be a few; it’s not going to be like 2008 and 2009. In that economic struggle, home prices had decreased a lot because they had been very inflated beforehand. Instead of waiting for foreclosures, take advantage of the excellent interest rates that we’re seeing in the 2% range (which is crazy!). It’s a wonderful time to buy a property, even if you can’t find a foreclosure.
If you have any questions about foreclosures or real estate in general, reach out via phone or email. We would be glad to help you.