Bank-owned Home Sales Stay High
Bank-owned house sales remained high during the second quarter of the year with homes in some stage of the foreclosure process, including short sales, rising to 31 percent of sales compared to 24 percent a year earlier.
However, that number was down from the 36 percent share during the first quarter of this year, according to market research by the online foreclosure marketplace RealtyTrac.
The average sales price of homes in foreclosure or bank-owned was $164,217, which was 32 percent lower than that of homes not in foreclosure. That figure is down by slightly less than 1 percent from the first quarter but a decrease of nearly 5 percent compared to the same quarter a year earlier.
James Saccacio, chief executive officer of RealtyTrac, put the situation into perspective.
"With average prices on distressed real estate trending down and average discounts trending up, this report is clearly good news for well-positioned buyers and investors looking for bargain real estate that will build them wealth in the long term and often cash flow as rental real estate in the short term," Saccacio said in a statement. "Maybe less evident, however, is the good news in this report for distressed homeowners looking to sell, and even lenders saddled with large portfolios of delinquent loans."
"The jump in pre-foreclosure sales volume coupled with bigger discounts on pre-foreclosures and a shorter average time to sell pre-foreclosures all point to a housing market that is starting to focus on more efficiently clearing distressed inventory through more streamlined short sales -- at least in some areas."
"This gives distressed homeowners who do not qualify for loan modification or refinancing -- or who are not interested in those options and want to sell -- a better chance of completing a short sale to avoid foreclosure. Streamlined short sales also give lenders the opportunity to more pre-emptively purge non-performing loans from their portfolios and avoid the long, costly and increasingly messy process of foreclosure and the subsequent sale of an REO -- which may end up selling for a lower price than it would have as a pre-foreclosure short sale and in the meantime further stresses already overloaded REO departments," Saccacio said.
New home sales fall in July
New home sales in the United States fell by 0.7 percent in July from June's figures, marking the fourth consecutive month of drops, Commerce Department officials said Tuesday.
At this rate, new home sales are set to finish the year at the worst on record in the past 50 years.
Economists say that home sales in a healthy US market should average 700,000 monthly, but July saw an annualized sales rate of only 298,000 new homes.
At the current rate of sales, it would take 6.6 months to sell off the nations existing inventory of 165,000 new homes for sale.
In the meantime, the slump in new home sales coupled with the high existing inventory of available homes continues to depress the construction industry.
Construction has served as an economic engine to pull the nation out of previous recessions. However, with continued high unemployment of underemployment, there are fewer people able to buy homes. Only 63.9 percent of working-age Americans had either a part- or a full-time job in July, usually 89 percent or more have jobs and paychecks.
Even lower interest rates on mortgage loans are not helping to boost new home sales.
One of the problems is the growing inventory of existing homes available as short sales or foreclosures.
However, another problem is that millions of people in the shrinking pool of working-age Americans with a job are involuntarily working part-time and do not have the income to qualify for a mortgage, or they have experienced credit problems and cannot qualify for a loan.
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Real Estate - Bank-owned Home Sales Stay High
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