For years I have been hearing (and talking about it here) the “wave of foreclosures that are just around the corner”.  For years the wave has been just around the corner, over the horizon and getting ready to hit.  We did have a tsunami of foreclosures, and Gwinnett County has been one of the worst hit in Georgia, but the second wave has been a phantom…

Foreclosures fall behind retail sales in Gwinnett

Foreclosures fall behind retail sales in Gwinnett

And I am about ready to say that it will remain a phantom.  That isn’t to say that there won’t be more, but I would like to lay to rest the idea that the banks have a pile of foreclosures that they are “about the release” or that “will hit the streets in the next few months”.

If there was a time, it would be NOW.  There is little inventory, prices are starting to strengthen… the time would be ripe.

Instead… we see the first chart.

The green line represents wholesale (foreclosures, short sales, pre-foreclosure sales, etc.).  It has dropped over the last few months… as retail (that would be regular sellers) have surged.  One not to include here… the red line (new homes) only represents a portion of new home sales.  Builders only report “inventory sales” to the MLS.  And many of their sales are “pre-sales” (houses purchased before they are built).  Some builders are selling 3 or 4 pre-sales for each inventory home.  Expect that the red line might actually be 50% higher than it shows…

Prices rebounding in Gwinnett County, GA

Prices rebounding in Gwinnett County, GA

To be sure, everything isn’t all wonderful… but it is a load better than a year ago.  Right now, actual people that want (or need) to sell their homes have a shot.

The next issue that will start to right itself over the next couple of years regards the people that have been through this wave of foreclosures…

It takes most people 3 years to recover from a foreclosure, short sale, pre-foreclosure, deed-in-lieu or other mortgage shortfall.  So, over the last three years, as Gwinnett County has been ravaged by foreclosures and similar issues, thousands of homeowners have been locked out of the market… instead, largely joining the ranks of renters.

That won’t last…

And as they come back into the home market, with the reduced inventories we’re seeing, expect to see continued price strength.

Like I said, it isn’t all wonderful, but we are looking at the beginnings of a Gwinnett recovery.  If it follows the Forsyth recovery (they weren’t hit as hard) you can expect to see the market heat up quite a bit through the end of the year as the pent-up demand is released.

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