Short Sales and Foreclosures Aren't Going Away Any Time Soon

According to a report released by First American CoreLogic estimating that the typical U.S. homeowner whis is currently in a negative equity position will not see positive equity in their homes until late 2015 to 2016. Furthermore, in some depressed markets, the underwater homeowner won’t see positive equity until 2020 or later.

According to an earlier report by First American CoreLogic, once a homeowner has over 25 percent negative equity or the mortgage balance is $70,000 higher than the current property value, homeowners begin to default with the same propensity as investors, meaning they no longer feel like they have to do whatever it takes to keep their home and consider walking away, see that as a better financial alternative. In the 4th quarter of 2009, the average amount of negative equity an underwater homeowner had broker the $70,000 threshold.

Even with the current lending programs introduced from the Obama Administration, underwater homeowners will find it hard to be optimistic enough to stay in their homes.  This means short sales and foreclosures will continue to steadily stream in over the next couple years supplying the investor pool with consistent inventory.