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Low Prices at Home Foreclosure Auctions Pull Down Inventories

May 12th, 2011

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The low prices of residential properties in the U.S., particularly those properties that are offered at home foreclosure auctions, have been cited as one of the primary reasons for the decline in some markets' for-sale residential inventories. In Washington State, several county markets saw their supplies of residences for sale shrink in March 2011.

Low Prices at Home Foreclosure Auctions Pull Down Inventories

Although the supply of Seattle foreclosures for sale and non-foreclosed homes for sale in various other areas of Washington State remained elevated compared with pre-crisis levels, numbers have been dwindling in the past few months in certain local areas. In Clark County, for example, the inventory of for-sale dwellings dipped in March 2011 to a supply equivalent to 8.3 months compared with February 2011 when the supply was at 12.1 months.

The supply of non-foreclosed residences and foreclosures for sale in Washington has been dipping in a number of areas like Clark County for months now, realtors have reported. In Clark County, the drop in March was a huge improvement, given that inventory in the region around two years ago was a whopping 18.6 months. According to local housing market analysts, the decline in the supply of for-sale houses was caused by higher sales which, in turn, were prompted by lower selling prices.

During March of this year, at total of 390 residential properties were purchased by buyers from home foreclosure auctions and other selling channels in Clark County. The total was up by a huge 29.7% compared with February 2011 when 274 housing units were involved in closed sales transactions. However, the median selling rate of residences in the region dipped month-over-month in March, which analysts believe is the main factor that drove buyers into the market.

The median selling rate of new houses and previously owned residences, including those from listing of foreclosure home sale, was pegged at $186,400 in March 2011. This median rate was down by 1.9% compared with the February median selling rate of $190,000. It was also lower from March of last year by 12.7% when the median sales price was at $210,000. Local realtors stated that the same trends are likely to continue for the rest of the year.

Industry analysts in Clark County mostly expect sales to pick up at home foreclosure auctions in the coming months. However, they also predict that prices will continue to tumble, although the shrinking supply might help slow down the price decline. They also stated that the same can be expected in most parts of the U.S.

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Bank and Government Home Foreclosure Listing Failed to Stem New Homes

May 5th, 2011

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The number of residential properties under bank and government home foreclosure listing in Myrtle Beach, South Carolina is still high, but this did not stop local homebuilders from starting several construction projects. According to builders, the current number of new houses being built is the most seen in Myrtle Beach in three years.

Even with a lot of low-priced Myrtle Beach foreclosures for sale to compete with, builders are currently working on over 50 single family dwellings in the city, the highest number recorded in the area since the year 2008. Majority of the homebuilding projects are reportedly happening in the former Air Force base. Local officials have welcomed the surge in activities in the past couple of months, asserting that this shows that the area's economy is starting to recover.

Since there are still a huge amount of foreclosures in South Carolina, housing market observers stated that it will take some time before the area's housing market returns to normal levels. However, they agreed that the recent surge in construction activities in Myrtle Beach portends good things for the region's residential market. Local reports revealed that the busiest areas have been the Market Common, Sienna Park and Gulfstream Cottages. They also revealed that a big number of these new houses have already been purchased, which means that more would have to be built.

Local realtors reported that new houses, particularly in areas like Emmens Preserve, are able to compete with cheaper houses under bank and government home foreclosure listing because of their good location. These dwellings are close to the beach, the airport and the Market Common, realtors have claimed. Developer Lennar Corp. has reported that it has sold 140 houses located in Emmens Preserve in the past one year and a half.

Realtors have also stated that even with a lot of cheaper foreclosed homes for sale available in these areas, most recent buyers prefer to purchase new homes, leading to further development projects especially in the townhome and single family dwelling categories. Realtors also stated that most of these development projects have been planned since before the start of the foreclosure crisis. When the housing industry tanked, most of the plans were put on hold, but majority of them are now being continued.

Although bank and government home foreclosure listing is expected to expand in the area in the coming months, developers and homebuilders are optimistic that the new home market will continue to thrive. They predict that more people will come into Myrtle Beach and purchase new houses.

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Foreclosed and Bankruptcy Homes for Sale Weigh Down Homebuilding

April 28th, 2011

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With thousands of cheap foreclosed houses and bankruptcy homes for sale to compete with, the new home industry of Indianapolis, Indiana is finding it hard to get a bigger share of the home buying market. Home construction continues to struggle in the region as builders are forced to scale back residential projects due to lack of potential buyers.

Foreclosure listings in Indianapolis dominated sales deals during the month of March 2011, with homebuilders still struggling to find a section of the market where they can sell new houses without incurring too much loss. During the month, home building activities remained low, with construction permits declining by 22% compared with the same month of 2010. A total of 372 construction permits were issued in March, according to a report released by the Builders Association of Greater Indianapolis.

The effect of foreclosures for sale in Indiana on homebuilding was almost the same among all the counties of the metro area, with some recording flat home construction activities for the month, while most have recorded declines. However, Hancock was the exception, with building permits rising to 20 in the area during March 2011 from the total of 15 posted during March 2010. Despite the year-over-year decline, Indianapolis' permit numbers actually jumped when compared with the previous month.

The number of residential construction permits in the metro region in March represented a jump of 80% when compared with February 2011. And despite the impact of low-priced foreclosures and bankruptcy homes for sale, the total for March was the highest for a single month in a span of one year. The highest total was posted exactly one year ago in March 2010 when 476 housing construction permits were issued in the metro region.

At the national level, homebuilders were able to gain ground despite the continuous flood of foreclosure homes for sale in the U.S., with home building activities rising by 7.2% in March compared with February. Construction activities for the month also marked the highest level for the country in half a year. However, construction permit figures are still way below the average of 1.2 million annual permits commonly seen during normal housing market conditions.

Although foreclosures and bankruptcy homes for sale are expected to rise again this year, homebuilders are optimistic that interest in new homes will rise in the coming months as consumers become more confident over the direction of the housing industry and the national economy. They expect sales to increase, particularly during the spring home buying season.

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Market Favors People Buying Condo Foreclosures and Residences

April 14th, 2011

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Traditional homebuyers and investors who are into buying condo foreclosures and other types of residential properties will retain their advantage for the rest of 2011, according to majority of housing industry analysts. They argued that the residential property sector will remain a buyer's market for the rest of the current period.

The number of Omaha foreclosures for sale might not have risen along with most U.S. metro regions, but it is undeniable that the metro area also felt the impact of the nationwide housing industry crisis. For most analysts, predicting the end of the foreclosure crisis is a difficult one. Some of them are expecting prices to bottom out by the end of this year, while others are asserting that housing will not pull itself out of the crisis until 2016.

With Nebraska foreclosures and non-foreclosed home prices both way below normal market levels, some analysts are predicting that more buyers will come into the market in the next few months which could help lower the inventory of distressed properties not only in the state, but also in the rest of the country. This, the more optimistic analysts have revealed, will result in improvements in housing prices that will likely start by early 2012 after prices reach bottom at the latter part of the current year.

However, there are those who believe that the market will take another four years before it can recover. According to them, even if activities related to buying condo foreclosures and residential units increase by a huge margin this year; this will not have much dent on the inventory of residential properties available for purchase. They argued that the supply is too high to be cut down within a single year.

Analysts predicting a longer recovery time have claimed that there are still a lot of residential properties that sellers are holding back, with most of them waiting for the market to get better, while others are simply unable to compete with the low prices of foreclosures for sale that are currently available in the market. They further asserted that even if half of the current supplies of homes are sold, twice that number will enter the market to replace these sold properties.

Housing experts also noted that the number of people buying condo foreclosures and residential real estate should be even higher if not for the tight condition in the lending market and the high levels of unemployment. These factors, they claimed, are slowing down the recovery of the housing sector and the nationwide economy.

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Federal Tax Credits Replaced by Foreclosure Assistance in PA

April 7th, 2011

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A few years ago, the government provided federal tax credits to assist first time homebuyers acquire a new home and to also stimulate the declining housing market. Now, the problem is more serious, with thousands of homeowners more worried about keeping their homes than finding financial assistance to purchase houses.

The problem is prevalent in almost all regions of the U.S. In Philadelphia, foreclosures have risen to such a level that prices have plummeted to a degree that buyers seemed to be acquiring free foreclosure homes in Philadelphia instead of buying them. That is how low the prices have fallen. With more foreclosures expected to come into the market in the next few months, state officials have stepped up efforts to assist existing homeowners save their homes from foreclosures.

The government cannot give free foreclosure homes in Pennsylvania to families, but they can help existing homeowners keep their homes through a program that will be administered by the state's Housing Finance Agency. The state government has recently announced that the U.S. Department of Housing and Urban Development had approved $105 million worth of funds to be given to Pennsylvania and used in assisting homeowners at risk of losing their homes to foreclosures. The effort is part of the Emergency Homeowners' Loan Program.

With the federal tax credits already relegated to history, state officials are now focusing on helping revitalize the housing market of the region by focusing on existing residential property owners and by doing all they can to prevent foreclosure numbers from further increasing. The latest financial assistance is being seen as a way to achieve these goals.

Aside from helping individual homeowners, officials stated that the funding will also help the overall economy of Pennsylvania by saving more residential properties from listings of foreclosures. Under the program, homeowners will be provided with payment-deferred loans of as much as $50,000 to pay off mortgages. This, local officials have revealed, will be a great help to troubled borrowers and will give them more time and chance to focus on rebuilding their financial conditions. Officials have encouraged troubled homeowners to line up for a slot in the program.

Unlike federal tax credits, the latest funding is not meant to stimulate home buying activities, but is geared towards existing homeowners facing the possibility of losing their houses to foreclosure. Officials are also hoping that the program will improve values of properties in the region as it prevents more homes from getting foreclosed on.

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More People Show Interest in Buying Houses at Foreclosure Auctions

March 31st, 2011

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More people are said to be showing interest in buying houses at foreclosure auctions and at other regular home-buying channels in Chicago, Illinois. Although sales and home prices continued their decline in February of this year, realtors reported that optimism is high among sellers as buyers showed increased interest in making a purchase.

Although prices are still in a slump, with most buyers able to acquire properties at prices that are almost like having free foreclosure homes in Chicago, realtors stated that there is a possibility that the spring season will bring the first sustainable recovery in the region's housing market. Signs of improvement are there, realtors asserted, with pending sales in February reaching their highest levels since April of last year.

Also, realtors are reporting multiple offers for foreclosures for sale in Illinois and other residential properties, with open houses also reporting increased traffic. Analysts have claimed that although this interest did not manifest in actual sales during the first two months, the coming spring buying season will likely reflect the optimism. According to them, buyers are moving out of the sidelines and entering the market, prompted by several developments that favor purchasing now than later.

Analysts asserted that buying houses at foreclosure auctions will soon pick up, mainly because buyers who have waited have mostly noticed that although interest rates are still low, there are signs that they will be rising soon. Also, rental rates are starting to rise, which could convince a huge percentage of renters to become homeowners instead of tenants. News that down payments will increase further in the coming months is also propelling a lot of buyers to look at what is available now.

In addition, homes are currently at their lowest price levels, with most properties found at free foreclosed homes for sale listings having asking rates never before seen in the market. These prices though, might increase at any given time since the economy and the job market are showing signs of improvement. Those who have delayed purchases last year might get tempted to buy now before prices rise, analysts further said.

Sales of homes in Chicago went down by 8.8% in February of this year compared with one year ago and also posted a drop of 2% month-over-month. However, analysts believe that the number of people buying houses at foreclosure auctions will rise in the coming months as homebuyers try to take advantage of bargain prices and low interest rates before they disappear.

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Pre Foreclosure Properties Held Back Home Construction

March 24th, 2011

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The presence of low-priced distressed houses and pre foreclosure properties continue to hinder the growth of the home building sector in Indianapolis, Indiana, analysts have reported. Permits for home construction projects declined in the metro area in February 2011 compared with year-ago levels. According to housing industry analysts, the same thing is happening at the national level.

Local realtors reported that bargain-priced Indianapolis foreclosures for sale are taking a huge chunk out of new houses' market share. Moreover, demand for single family dwellings has been week in the past few months, causing home building activities to stutter. In February 2011, permits for house construction declined by 43% compared with February 2010. The total number of permits issued for the nine counties of the Indianapolis metro region was 201, according to data presented by the Builders Association of Greater Indianapolis.

The impact of Indiana foreclosures was felt in almost all markets of the state, analysts have revealed, with house construction activities remaining flat or declining in all counties of the region in February, except in Hancock. The county only had 11 home building permits issued in February, but the total represented an increase since only four were issued in the area in February of last year. In Marion County, a total of 39 permits were issued in February of this year; down by 55% from the same month of 2010.

In Hamilton County, home builders are relatively active during the month despite tough competition from distressed homes and pre foreclosure properties. The county had 72 permits filed during February, and although this total is higher than most local markets, it still represented a decrease of 52% from year-ago levels. Combining January and February figures will give Hamilton a decrease of 38% compared with the same two-month period of 2010.

According to housing industry analysts, the continuous rise in the number of foreclosures for sale, which had depressed housing prices, is largely responsible for the slowdown in home building activities not just in Indianapolis, but in the rest of the U.S. They also stated that tight lending procedures have made it more difficult for home builders to find buyers, while those who can afford to buy a new house are mostly waiting to see if prices will decline further.

Market observers are expecting further downturns in home building activities in various U.S. markets. They asserted that, as long as distressed houses and pre foreclosure properties are in high supply, new houses will not be able to gain traction, particularly with most homebuyers still not fully confident on where the economy is going.

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Bankruptcy Homes and Foreclosures Account for Big Percentage of Sales

March 17th, 2011

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Low-priced foreclosures and bankruptcy homes account for a large part of housing sales in the Twin Cities of Minnesota. This has resulted in price declines for February 2011 compared with the year before. Actual sales and pending purchases are also down from the same 2010 month.

Data provided by the Minneapolis Area Association of Realtors showed that pending home sales went down by 13% in February 2011 compared with year-ago levels to reach a total of 3,082. Meanwhile, closed sales of St. Paul and Minneapolis foreclosures for sale and non-foreclosed properties declined by 1.7% compared with February 2010. However, when compared with February 2009, sales were actually higher by 2.5% and also up from February 2008 by 5.6%. Median selling prices, on the other hand, dipped in February compared with one year ago.

The median rate for Minnesota foreclosures and non-foreclosed dwellings sold in the Twin Cities during the month was $143,000, down by 10% from February 2010. The percentage of total housing sales accounted for by foreclosed properties jumped by almost 40% in February of this year compared with year-ago levels. Housing market analysts stated that this is the reason for the drop in median prices. Selling prices dropped in almost all housing segments during the month when compared with 2010 levels.

Prices of bankruptcy homes and foreclosed houses dropped by 12.5% in February of this year compared with February 2010 to around $105,000. Meanwhile, median selling price for regular or non-foreclosed residential properties was at $194,605 in February of this year, down by 4% from one year ago. The price of houses sold through short sales went down by 3.2% from the previous year to reach a median of $140,290.

According to housing industry analysts, the continuous decline in home prices is mainly due to the oversupply of properties in free home foreclosure listings. Foreclosed properties are sold at very low prices, with most regular home sellers also forced to lower their asking rates to be able to compete with cheap distressed dwellings. Prices of residences are expected to continue to drop for the rest of 2011 as more foreclosures enter the market.

Most housing analysts predict further increases in foreclosed and bankruptcy homes this year, which will mean further depression in prices. They also believe that 2011 will be much the same as 2010 for the housing industry, with home sellers finding it difficult to unload their properties and most of them forced to lower asking prices just to close purchase transactions.

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Real estate Investments and Housing Sales Decline in King County

March 10th, 2011

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The number of real estate investments and houses sold in King County, Washington declined in February compared with the previous month and the year before. Prices of homes also took a tumble, with both median and average selling rates recording lower figures. Despite the poor showing for the month, realtors are optimistic that sales and prices will pick up in spring.

A total of 1,244 foreclosed homes for sale in Seattle and non-foreclosed dwellings in the rest of the county were purchased in February 2011, down from the January 2011 total of 1,259. The figure was also lower than one year ago when 1,255 dwellings were sold in February 2010. In terms of average selling price, King County's was pegged at $401,339 in February, down from the $411,353 recorded in the previous month.

The figure also posted a drop when compared with the February 2010 average selling price of 429,288. According to realtors, part of the reason for the decline in prices is the oversupply of foreclosed homes in Washington which are mostly offered at bargain rates. Meanwhile, median selling rate last month was at $320,000 for the whole county, down from the January 2011 median price of $333,500.

Figures were also down from year-ago levels as February 2010 median rate was pegged at $343,500. Despite the decline in prices, not a lot of real estate investments were recorded in the county and homebuyers were also relatively few. Much of the same can be seen in other counties of the Western Washington region. For the region's 20 biggest counties, including King County, February 2011 sales declined to 3,080 from the January 2011 total of 3,207.

Although there are no such things as free foreclosure homes, some market observers have stated that the current prices of dwellings in the area and in most U.S. markets seemed as if the properties are simply being given away. The average price for all counties in February was $304,501, a decline from the previous month's $305,428. Median rate also went down from January's $243,500 to $240,000 in February.

Despite the poor price and sales figures for the month of February, realtors believe that the coming months will be better. They predict that real estate investments and housing sales will improve, particularly during the spring; traditionally the strongest season for the U.S. housing market. In terms of prices, analysts stated that they are likely to remain low, but will definitely improve from the first two months of the year.

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Foreclosure Process for a Home Showing a Different Face

March 3rd, 2011

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The foreclosure process for a home usually starts when the homeowner is late in paying his or her monthly mortgage loan. In the past, majority of cases involved homeowners who had took out subprime mortgages or bad loans. Recently, however, more and more traditional borrowers are losing their homes to foreclosure in Tennessee.

Although Nashville foreclosures for sale and statewide distressed property figures are still dominated by properties with subprime loans, an increasing number of traditional mortgages are joining the foreclosure fray, with a big amount of properties coming from higher-end neighborhoods and more expensive home communities.

Data showed that an increasing percentage of Tennessee foreclosure homes for sale came from suburban areas whose owners purchased the properties at a price ranging from $200,000 to $400,000 during the pre-crisis area. They are also borrowers who took out traditional loans and most of them have multiple sources of income, having more than one person in the household employed at a high paying job.

Analysts stated that the problem lies in the job element. A big number of properties entering foreclosure process for a home are reportedly owned by people who can afford a high-end dwelling a few years ago, but have lost their jobs in the past year. This resulted in their inability to pay for their mortgages, regardless of the fact that they have traditional loans, which are considered relatively safe.

The latest properties entering the distressed market are not like most houses that are priced so low that it is like offering free foreclosed homes for sale. Majority of the latest additions to the state's foreclosure figures are reportedly priced at least $200,000, with most of them coming from previously insulated suburban areas. Census reports showed that the foreclosure problem is creeping towards areas like Cordova and other high-end neighborhoods in Shelby County.

The same development is happening nationwide, analysts have reported. Last year, an estimated 87% of delinquent borrowers or properties entering the foreclosure process for a home for the first time were accounted for by prime rate loans. The figure is expected to rise again this year unless big improvements will happen in the nation's job market in the coming months.

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