foreclosures

Distressed Sales Drag Down Home Prices

An analysis of home prices through the end of February by CoreLogic shows a year-over-year decline of 6.7 percent when distressed properties – REO and pre-foreclosure short sales – are included in the numbers.

Take out the distressed factor, and the company says home prices are “showing signs of stability,” down just 0.1 percent from a year ago.

February’s 6.7 percent drop marked the seventh straight month that CoreLogic has recorded a decline in its national home price index, counting both distressed and non-distressed properties.

“When you remove distressed properties from the equation, we’re seeing a significantly reduced pace of depreciation and greater stability in many markets,” said Mark Fleming, chief economist with CoreLogic. “Price declines are increasingly isolated to the distressed segment of the market, mostly in the form of REO sales, as the stock of foreclosures is slowly cleared.”

A separate report released by Clear Capital also points to the impact of distressed property sales on home price trends.

Clear Capital’s data extends through the end of March, and the company says home prices in the western part of the country, where distressed homes account for some 40 percent of total sales, are continuing to steadily decline and have now fallen to a new, double-dip low for this cycle.

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Home and Commercial Inspections in the Columbia SC area is our specialty! Every year we help hundreds of clients save tens of thousands of dollars, by responsibly finding and exposing conditions that threaten property, value and safety. To learn how we may be able to serve you, please click and read, or call 803-261-5810.

Selling a Home in a Foreclosure Market

If you absolutely, positively don’t have to sell in this market, then don’t, but if you must, whether now or five months from now, take the plunge now.

The slowdown in foreclosure activity could mean somewhat less competition.

But even more critical, there is the boomerang effect to take into account. The number of foreclosures is expected to skyrocket as we head deeper into 2011

Foreclosure sales were once rare. In some markets now, they make up 20 percent to more than half of all sales.

If you are a long-term homeowner who has kept up on your mortgage payments, you need to get that message out. This is your key advantage over a much lower-priced foreclosure, especially in light of the robosigning mess.

The buyer knows who he or she is buying the home from — no title issues here.

You can bet savvy buyers these days are going to come in with a stack of comps, many of them rock-bottom foreclosures.

Provide your own market analysis, one that can help highlight the challenges facing foreclosed properties.

Your first report should be comparable homes sold in the past few months, with foreclosures broken out separately if mentioned at all.

The second should detail homes currently on the market. That will help you frame the decision on favorable terms: Buyers should consider homes like yours instead of foreclosures.

The aim is to sell your home and maybe come away with a small gain. Forget about making a killing. Few homeowners who are current on their mortgage can match a foreclosure price.

Buyers are still looking for low prices. Take a look at what other nondistressed properties are selling for in your neighborhood and then price below them.

Drive home the point that the price is the price — with foreclosures the bank can take a better offer right up to the day of the closing.

Many buyers haven’t a clue about what it takes to buy a foreclosed home.

In many cases, individual buyers don’t stand a chance as they end up competing with investors ready to pay cash.

If a buyer or agent doesn’t know this, enlighten him or her. There is a significant percentage of buyers (that) could not buy a foreclosure if they wanted to.

When all else fails, call an expert. Call a real estate professional to help you get your home sold. Going it alone, ESPECIALLY in this market, could be the most foolish decision you ever made.

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Home and Commercial Inspections in the Columbia SC area is our specialty! Every year we help hundreds of clients save tens of thousands of dollars, by responsibly finding and exposing conditions that threaten property, value and safety. To learn how we may be able to serve you, please click and read, or call 803-261-5810.

High End Homes Selling Quicker

While home sales across much of the country have languished in recent months, struggling to pick up speed, a recent report says homes on the higher end of the market are selling with renewed vigor.

According to DataQuick Information Systems, the number of home sales worth more than $1 million increased in each of the 20 cities tracked by the firm last year, with sales jumping an average of more than 18 percent.

The largest gains were seen in San Jose, California, and Honolulu, Hawaii, where sales increased 27.4 and 26 percent, respectively. Even Phoenix, where foreclosures have made up a large part of the market, saw an increase in high-end sales.

Upper-echelon buyers have also benefited by more affordable mortgage rates. Back in 2009, mortgage rates for loans over the threshold set by Fannie Mae and Freddie Mac were 1.8 percentage points higher than standard loans. The current gap is just 0.6 points.

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Home and Commercial Inspections in the Columbia SC area is our specialty! Every year we help hundreds of clients save tens of thousands of dollars, by responsibly finding and exposing conditions that threaten property, value and safety. To learn how we may be able to serve you, please click and read, or call 803-261-5810.

Rents Could Be On The Rise

Renters Beware: Double-digit rent hikes may be coming soon.

Already, rental vacancy rates have dipped below the 10% mark, where they had been lodged for most of the past three years.

By 2012, some are predicting the vacancy rate will hover at a mere 5%. And with fewer units on the market, rental rates will explode.

Rent hikes have averaged less than 1% a year over the past decade, according to Commerce Department statistics, adjusted for inflation. Now, rents may spike 7% or so in each of the next two years — to a national average that will top $800 per month.

This is a sharp change from the recession, when many Americans couldn’t afford to live on their own. More than 1.2 million young adults moved back in with their parents from 2005 to 2010. Many others doubled up together.

As a result, landlords had to reduce prices and offer big incentives to snag renters.

Now that the recession is easing, many of these young people are ready to find new places, mostly as renters, not owners. Plus, the foreclosure crisis continues unabated, and the millions losing their homes are looking for new places to live.

There’s one factor that could actually rein in rent increases: the huge number of foreclosed homes that could hit the market over the next few years.

In many markets there are neighborhoods filled with recently built, single-family homes going for fire-sale prices. When the cost of owning homes falls well below the costs of renting them, more people will buy.

Stay tuned, this should be an interesting ride for rental rates and home buying trends.

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Home and Commercial Inspections in the Columbia SC area is our specialty! Every year we help hundreds of clients save tens of thousands of dollars, by responsibly finding and exposing conditions that threaten property, value and safety. To learn how we may be able to serve you, please click and read, or call 803-261-5810.

Home Affordability Remains High

The U.S. Department of Housing and Urban Development (HUD) and the U.S. Department of the Treasury released the February 2011 edition of the Obama Administration’s Housing Scorecard. The latest housing figures show increased existing home sales as home affordability remains high, but officials caution that the market remains fragile, as prices are unsettled.

“In the face of the deepest economic recession and housing crisis in decades, the Obama Administration has taken unprecedented action to promote stability in the market—keeping millions of families in their homes and helping millions more to save money by refinancing.

But the data clearly show that the market remains extremely fragile,” said HUD Assistant Secretary Raphael Bostic. “While we cannot stop every foreclosure, we know that many responsible homeowners are still fighting to make ends meet. Through the broad range of programs this Administration has put in place, we can put help in reach to those homeowners as early as possible.”

The housing market remains fragile as data through January 2011 paint a mixed picture of recovery. Existing home sales ticked upward in January, but remained below levels seen in the first half of 2010.

Mortgage delinquencies continued a downward trend compared to early 2010 and foreclosure starts and completions remain below peak. However, as lenders review internal procedures related to foreclosure processing, many foreclosure actions have been delayed. The decline is likely to be temporary as lenders eventually revise and resubmit foreclosure paperwork in the coming months.

Given the current fragility and recognizing that recovery will take place over time, the Administration remains committed to its efforts to prevent avoidable foreclosures and stabilize the housing market.

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Home and Commercial Inspections in the Columbia SC area is our specialty! Every year we help hundreds of clients save tens of thousands of dollars, by responsibly finding and exposing conditions that threaten property, value and safety. To learn how we may be able to serve you, please click and read, or call 803-261-5810.

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