@Melvin Maxwell
That's a great question and it's not really too easy to pin point what the exact impact is going to be. In my discussions with other pros, brokers, and the more seasoned investors that have been doing this for a while I've gathered a few notes that might shed better light into the situation.
For one, although the foreclosures are stacking up, from what I hear the banks and REOs are going to need to be smart about releasing them. If they do it all at once it will invite the opportunity for them to take larger losses rather than if they release in doses they could potentially fetch more of their money back on an individual property basis. So there may be a lot of what some call "shadow inventory" but the market likely won't see all of it at once. So it's possible that this will impact the available inventory and the overall market with a lot less force than people may think.
Another thing to consider is that who is going to get to the motivated seller that's facing a foreclosure first? The demand is CRAZY high right now. There are A LOT of active investors with money to spend that are marketing like crazy to these sellers right now. Does the seller want to get foreclosed on or get the property sold through off-market means before hand? So a lot of this inventory may never even reach the bank's hands. Obviously there are some situations that are worse than others and some homeowners may not actually have a choice.
Something else to think about is that there is already a massive shortage of available inventory at the moment. This leads me to think that although there may be a sudden influx of new inventory, the demand that has been stacking up all these months is going to very rapidly accumulate this inventory and this sudden rush will probably dissipate as fast as it arrives. This all is purely speculative but there might be a good, but ultimately short window, to get in at lower prices in the off-market realm.
To sum this up and to answer your question, I think the demand is high enough that when this inventory hits the market that it will very quickly get scooped up and we'll be back into a more "normal" situation, if you will. The short term and long term prospects still look promising as the market continues to seek equilibrium. The pillars of our local economy remain strong and improving, large amounts of migration to Texas cities is still in progress, new businesses are arriving (especially like the California giants making the leap to Texas), positive COVID vaccine news, and all the things I mentioned in the post should hold firm barring any major unforeseen meltdowns.
I hope this helps! Let me know what you think!
Cheers!
