- Banks take a period of time before the property is put back on the market
- Because it takes time to put the house back on the market, we do not see the complete mess we are in. We only know about foreclosures that have occurred when in fact more have occurred but are not listed yet.
- The flood of foreclosed homes will continue to erode the housing market.
- Banks may be holding onto properties in order to prevent housing prices from declining further.
- The correction in the housing market is further off than we might anticipate.
- Adding up these facts leads one to conclude that the foreclosure aspect of the recession is worse than we imagine or might have understood based on article data.
CNN Money: Flood of foreclosures: It's worse than you think
Many foreclosed homes and other distressed properties that are now owned by banks have yet to be listed for sale. The volume of this so-called 'ghost inventory' could be substantial enough to depress already steeply falling prices when it does go on the market.
"Once a bank repossesses a property, in some cases, it can take more than six months to hit the market."
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