After a relatively mild jobless report in May, few people were expecting the sharp spike in unemployment claims seen in June, which are fueling fears of another foreclosure crisis.. Employers cut 467,000 jobs in the month of June, raising overall unemployment to 9.5%. Approximately 14.7 million people are out of work and looking for a new position. Manufacturing represented the largest job loss by sector, with 136,000 job cuts. The professional and business services sector followed with a loss of 118,000 jobs, and construction firms eliminated nearly 80,000 positions.

The loss in construction is especially troubling to those looking for signs of recovery in the housing sector. Inventories of both new and existing homes are hovering around 10 months. Economists predict that the job losses will continue, even if the economy notches some positive growth. Further job losses are also expected to fuel home foreclosures among homeowners who previously experienced no difficulty in making their mortgage payments. More homeowners will be forced to sell their homes to avoid foreclosure.

The size of the unsold home inventory is relatively good news for the short-sale investor. Homes in all price ranges are being labeled as distressed properties, and are available at prices significantly below their most recent recorded sales prices. For investors, the combination of low interest rates, substantial unsold home inventory in all major real estate markets and mounting pressure on lenders to accept short sales makes 2009 a banner year for short sale investment potential. There’s no guarantee that these conditions will last. If you plan to get into real estate investment via short sales, now is the time to move.

Photo Credit: Scott Drzyzga, via Flickr