While the nation's backlog of real estate-owned property expands indefinitely, some markets already at peak saturation levels will soon feel some relief.

Alex Villacorta, analyst at Clear Capital, said markets such as Atlanta and Tucson, Ariz., hit hard by the foreclosure epidemic, are filled to the brim with REO properties for sale and will see a falloff in 2013 — if not before then.

"However, on the broader national level, I don't see that happening," Villacorta said in a HousingWire webinar Wednesday.

According to Clear Capital, REO properties in Atlanta are at peak levels — 45% to be exact — while home prices receded to mid-1990 levels. The same trend is taking place in Tucson, which has a rate of 40%. The nation's REO saturation rate was about 25% at the end of 2011.

Some six million homes are at least 30 days delinquent or in foreclosure, according to the latest loan-level data tracked by Lender Processing Services.

Contrasting Villacorta's prediction, Bank of America housing analyst Michelle Meyers said in an interview with HousingWire, she expects the national flow of foreclosed properties to peak in 2013 and then slow.

And the way in which those foreclosures will sell is different from a few years ago. Dave Lee from from Auction.com says that 75% of the assets the site sells are sold on its online platform, unlike three years ago when 75% were sold in a live ballroom auction.

Auction.com is working on various innovative approaches to deal with issues at auctions such as collusion. The company is trying to reduce investor concerm by posting photos, tutorial videos and property information on its site.

As for the rising saturation of real estate-owned property, sales in the fourth quarter caused home prices in the Midwest to lead the nation in depreciation. Prices in the Midwest fell 4%, marking the first time in seven months the region leads the nation in quarterly losses. The West, South and Northeast were relatively calm, with quarter-over-quarter declines of less than 1%.

Villacorta recalled the onslaught of REO properties that entered the national market in 2008, which led to home prices dropping nearly 40% in the span of two year.

"I think that memory is fresh in a lot of people's mind," he said. "The industry overall has a better gauge of what REO means to market and how they can affect diminishing returns for these large portfolios."

"That's why you're now seeing these rental programs crop up, because it's clear something has to happen with REOs, but just pushing them out wholesale into the marketplace is not the solution," Villacorta added.

In an attempt to relieve the saturation in certain markets, the Federal Housing Finance Agency announced Monday the first pilot transaction under the Real Estate-Owned Initiative, whereby the government will take bids on nearly 2,500 properties in Atlanta, Chicago, Las Vegas, Los Angeles, Phoenix and Florida.

In January, Wells Fargo (WFC) said it will launch two multibillion-dollar programs this February to clear housing inventory in Los Angeles and Atlanta.

"Something needs to be done and that's where rentals come in as a nice intermediate step to push REOs off the books and still have have positive cash flow," he said.