Thousands of foreclosed homes will hit the market in 2013, potentially lowering the value of neighboring homes and piling on to the continued housing crisis. But some real estate experts are suggesting just the opposite will occur – auctioned-off foreclosures may act as a stimulus to the industry, adding inventory where there is a demand.

While this differs from state to state, most states are lacking housing inventory that these eventual foreclosures can fulfill. With so many banks accumulating pending foreclosures, it may be confusing to see banks sitting on properties for such a long time. However, a theory is banks are being cautious that foreclosures are done properly and comply with complicated, recently-passed laws and regulations.

So what should we expect in 2013? For most states, the rate of foreclosures may continue to lower. Based on RealtyTrac data, the foreclosure rate of loans opened between 2004 and 2008 were explicitly higher than the rate of loans after 2009. Between 2004 and 2008 the foreclosure rate was 2-5 percent, while in 2009 the rate was under 1 percent.

Another forecast for 2013 is the addition of inventory will meet the need of homebuyers. As banks release the inventory they have accumulated, we should begin to see a healthy amount of buyers stepping up and interested in the homes that are now available. While short sale and foreclosure rates vary across the nation, some real estate experts suggest completed short sales in 2013 will exceed previous years.

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