Foreclosures and oversupply affecting US real estate recovery

The US real estate recovery could be held back by an oversupply of housing and an increasing number of foreclosed properties entering the market, it has been claimed.

According to the latest figures from Radar Logic, the large number of homes flooding the market, in particular, could really hamper any further chance of recovery.

The organisation says that hopes for future price appreciation on property could be negatively affected by the "inventory overhang of distressed and non-distressed homes".

"Given the unprecedented number of homes in default, foreclosure, or REO inventory, and barring some unforeseen exogenous boost to housing demand, the price stability we saw in 2009 will likely come to an end in the second half of this year," Radar Logic said in its report.

The news could affect individuals looking to buy Florida property, with the destination boasting one of the highest foreclosure rates in the US.

Furthermore, the US commerce department reported that sales of new homes fell by 33 per cent last month to the lowest level ever recorded.

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