As the U.S. housing recession enters its fourth year, there's no sign of a recovery because speculators account for most of the rise in sales, Bloomberg reported.
While the purchases are trimming the inventory of unsold properties, most of those bought by speculators will likely return to the market when prices rise again, hampering any recovery, said Nobel laureate economist Joseph Stiglitz and Yale University Professor Robert Shiller in interviews.
"We're creating a shadow inventory of homes that will be right back on the market as soon as the economy and the housing market begin to improve," said Stiglitz, a Columbia University professor of economics. "We could see a double-dip in the housing recession if that happens."
Banks owned a record $11.5 billion of repossessed homes in the U.S. at the end of the third quarter, according to the Federal Deposit Insurance Corp. Foreclosures accounted for almost half of all U.S. purchases in November and homes in default helped increase sales 83 percent in California.
There were an average 3,100 foreclosures per day in the U.S. in November, according to RealtyTrac Inc., an Irvine, California real estate data company. That's triple the 1,000 per day average in 1933, the worst year of the Great Depression, according to the Federal Reserve Bank of St. Louis. The repossessed properties offer opportunities for investors, who typically buy homes at auction and rent them out until prices increase and they can sell.