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Foreclosures exceed 1 million last year, expected to grow in 2011
Foreclosures are expected to peak while prices bottom out in 2011 as the nation's housing crisis trudges into its fifth year.
Lenders repossessed more than 1 million homes in 2010, up 14 percent from the previous year and the most since 2005, according to a report released Thursday by RealtyTrac, a California-based company that tracks the foreclosure market.
"We will peak in foreclosures and probably bottom out in pricing, and that's what we need to do in order to begin the recovery," Rick Sharga, RealtyTrac's senior vice president, said in an interview at Bloomberg headquarters in New York. "But it's probably not going to feel good in the process."
Foreclosures could rise by 20 percent this year while prices will likely drop by 5 percent as the market begins to make a turn toward recovery, Sharga said.
Housing market analysts expect it will take a minimum of two years for the market begin recovering and possibly as many as five years before the recovery roots. Foreclosures are expected to remain high as homeowners contend with stubborn unemployment, tougher standards to get a loan and falling home values.
A record 2.9 million households, or one in 45, received notices of default, auction or repossession in 2010, up about 2 percent from the prior year.