Last Updated Jul 15, 2010 9:03 AM EDT
In the first half of the year, lenders repossessed nearly 528,000 homes and about 1.7 million homeowners got a foreclosure-related warning -- that represents one in 78 American homes. The numbers are startling, but this process is necessary after the massive housing and credit booms. As is the case with manias, the aftermath is messy and painful.
Unfortunately, due to the lengthy process involved in unwinding a bad home investment (versus, say a bad internet stock that takes 5 seconds to sell) the hangover period will persist for some time. RealtyTrac CEO James J. Saccacio said that while the foreclosure problem appears to be improving, we shouldn't be too confident, because "a massive number of distressed properties and underwater loans continues to sit just below the surface, threatening the fragile stability of the housing market."
Housing experts believe that it will take three more years to clear out the overhang of housing. There's a certain symmetry to that notion. From the years between 2000-2006, housing prices nationally doubled and it will likely take the seven years between 2007-2013 to rectify that aberration. Now who said that home prices never drop?
Image by Flickr User TheTruthAbout, CC 2.0