Foreclosure Prices on the Rise

You’ll be happy to know that the homes in foreclosure on your block are going to sell at an average of 28 percent discount last year and may continue to drive down U.S. housing prices as the supply of distressed properties grows, according to RealtyTrac Inc.  Of course I’m being facetious.  Foreclosure prices are up a tad under 1 Percent from 2009.  Although the prices are higher, they are still selling at significant discounts to the market price. If you are upside down on your mortgage and need to sell, this is NOT good news.  If you were counting on cashing out the equity in your home for your retirement, and moving to sunny locales around the world, this news makes it difficult to do that.

A total of 831,574 homes that sold in 2010 had received notices of default, auction or repossession, the Irvine, California-based data seller said today in a statement. Properties in distress accounted for almost 26 percent of all home sales last year, down from 29 percent in 2009.

A “bloated supply of foreclosures and weak demand from homebuyers” are depressing the market, James J. Saccacio, RealtyTrac’s chief executive officer, said in the statement. Residential real-estate prices dropped 4.1 percent in the fourth quarter from a year a earlier, according to the S&P/Case-Shiller index of home values in 20 cities.

“While accelerating foreclosure sales will help clear the oversupply of distressed properties and return balance to the market in the long run, in the short term a high percentage of foreclosure sales will continue to weigh down home prices,” Saccacio said.
Foreclosure filings may rise 20 percent to a peak this year as unemployment remains high and banks resume seizing property after a slowdown to investigate documentation procedures, the company said Jan. 13.

Distressed properties sold at a discount of 27 percent in 2009 and 22 percent the previous year, according to RealtyTrac. The discount reflects the sales price of homes in the foreclosure process compared with those not in distress, the company said.

Foreclosure Sale Prices Rising

Foreclosures sold at an average price of 172,030 in 2010,  up from $170,775 in 2009 and down from $200,708 in 2008. Counter balancing this news is another report from the National Association of Realtors released yesterday that sales of previously owned homes in the U.S. rose in January to the highest level in eight months as investors used all-cash transactions to snap up distressed properties.  Investors are making a killing at this time, IF they have cash with which to buy. Break open the kids’ piggybanks immediately.

Bank-owned properties or REO’s sold for an average discount of 36 percent last year, up from 33 percent in 2009, according to RealtyTrac.  These houses accounted for 16 percent of all U.S. sales, compared with almost 18 percent in 2009 and 13 percent in 2008. Residences in default or scheduled for auction sold for a discount of 15 percent, down from almost 17 percent in 2009.

Anthony
No health insurance? Click here