Foreclosure inventory will remain low in 2013

 Foreclosure Inventory via Wall Street Journal

Foreclosure Inventory via Wall Street Journal

With gains in housing prices the past year also comes an increase in home equity – very good news for current homeowners. But while those shopping for good deals (especially first-time home buyers and move-up buyers) are getting incredibly low interest rates, foreclosures and other REO inventory is shrinking drastically.

According to CoreLogic, foreclosure inventory is down 20% in November from a year ago. REOs fell from 19.6% to 11.5% between January and November 2012. This drop is due to a lower number of delinquencies and a more laborious foreclosure process that resulted from the original housing crisis issues.

Along with fewer foreclosures and REOs comes major competition to purchase deals by investors, first-time homebuyers, and the move-up buyers, hence the rise in prices. Economists are predicting that 2013 will see further declines in both REO and foreclosure inventory, but won’t be as steep a decline as we saw in 2012.