Five Million Homes Headed Toward Foreclosure

New York, NY, Feb. 16, 2010--Two new studies show there is more trouble ahead regarding foreclosures that will tend to depress home prices, according to a story in the Wall Street Journal.

John Burns Real Estate Consulting Inc. estimates that five million houses and condominiums on which mortgages are now delinquent will go through foreclosure or related procedures that will put them on the market over the next few years.

That would represent the bulk of the estimated 7.7 million households behind on their mortgage payments.

This "shadow inventory" of homes expected to hit the market is enough to last about 10 months, based on the average sales rate over the past decade.

A Standard & Poor's study also says that the "overhang" of foreclosed homes expected to go on the market points to lower home prices.