Archive for the 'Foreclosure Rates' Category

Home sales in Santa Clara County, California jumped by 17 percent last month, buyed by bank foreclosure properties for sale. The increase in total home sales in September compared with the same month a year ago is due to low mortgage rates and the flood of first-time buyers who want to take advantage of the $8,000 federal tax credit before it expires by the end of November.

Last month, home sales totaled 1,307, up from the 1,116 for the same month a year ago. Meanwhile, month-to-month median prices dropped by almost 2 percent, a smaller decline than in August. Industry experts are hoping that the trend could mean the market’s decline is nearing its bottom. July to August prices dropped by 5 percent.

Similarly, the median price of $506,000 last month was down by 8 percent compared with $550,000 the same month the previous year. Industry experts said that the drop in median price was due to the large number of low-priced homes being sold.

Experts noted a record high number of bank foreclosure properties for sale, with nonowner-occupied purchasing above average. They summed up the current market activity as very strong, with many purchases taking place due to the federal tax credit that motivated first-time buyers.

But they pointed out that the market is not yet out of the woods, citing the growing number of foreclosure properties which indicated that the economy is still not strong.

Recent market data showed a slight decline in the number of foreclosed homes in the Bay Area. However, foreclosures increased in Santa Clara County, accounting for 27.2 percent of the total condominiums and houses sold last month, an increase of 26.4 percent from August.

Industry experts said that foreclosure remains unabated because homeowners could not modify their loans into affordable rates and many have lost substantial equity on their houses. They pointed out that in many places, home prices were almost flat. However, the trend could change if a new wave of foreclosure starts coming into the housing market.

Furthermore, mortgage delinquencies continue to rise, resulting with many distressed homeowners who could end up modifying their loans, getting short sales or going into foreclosures.

Experts said that any price stability being experienced right could be rock again by another wave of bank foreclosure properties for sale.

An estimated 44 percent of all homeowners in the metro Toledo area in Ohio saw the values of their properties dropped less than their outstanding mortgages. As of June 2009, there were 61,155 houses with negative equity in the counties of Lucas, Ottawa, Fulton and Wood. The combined total value of properties with negative equity amounted to $7.2 billion.

According to industry analysts, the growing number of properties with negative equity is a predictor of the coming wave of bank foreclosed homes in the area. They said that many homeowners who have negative equity on their properties prefer to walk away from their houses and allow lenders to foreclose them.

Additionally, market data showed that 8,120 properties in the region were nearing the negative equity position. This means that these properties were within 5 percent of seeing their values to less than the mortgage owed by their homeowners. Analysts pointed out that nearly 50 percent of homeowners in the region are either close to having greater debt that their houses are worth or owe more than the value of their properties.

But Lucas County Foreclosure Task Force co-chairman Wade Kapszukiewicz does not believe that just because the property is underwater it is more at risk of foreclosure. He said that being underwater meant that people do not have the same net worth that they have five years ago, adding that they need to work more for less money.

Industry experts said that current market data showed that the housing situation in the metro Toledo area is getting worse. They pointed out that 2008 ended with 30,140 properties or 28 percent of all houses in metro Toledo area with mortgages were in a negative equity position.

The rate of properties with negative equity nationwide was 32 percent or 15.2 million. Statewide, 39 percent or 861,528 properties have negative equity.

Some industry experts viewed the figures with skepticism saying that most housing values do not represent the market.

Meanwhile, the foreclosure crisis in Ohio was fueled by massive layoffs in the manufacturing and automobile industry. A few months back, statewide foreclosure activity flatten due to the increase in the number of bankruptcy filings, which stop the foreclosure process.

But industry analysts are expecting foreclosure activity to pick up soon as more and more homeowners would choose not to spend more mortgage payments on properties that have negative equity.

Some industry experts in San Luis Obispo County, California are having a field day pointing out signs that the housing market is mending, albeit at a slow pace. They cited historically low home prices which they claimed could mean that the market has reached its bottom.

Home sales are improving brought about by the flood of buyers who took advantage of low interest rates and federal tax credits.

But the issue of the real market recovery is a cause of debate among industry experts and economists who offered conflicting opinions on when the housing market will reach the bottom. Some pointed out several factors that could hold off market recovery, including the increasing unemployment rate, new real estate appraisal rules, potential backlog of bank foreclosed homes and lingering doubts about the economic condition.

Industry experts who are cautiously optimistic about the current market situation said that many buyers are flocking to the market, taking advantage of low prices. But they are looking at the overall economic condition which they viewed as very fragile.

Senior economist Kirk Lesh of the Center for Economic Research and Forecasting at the California Lutheran University said that economic weaknesses could greatly hurt the housing market recovery in the county which has a high number of government jobs.

Lesh is anticipating an increase in unemployment this year until 2010. And he said that government workers who will get furlough would hold off buying new homes.

He added that the total foreclosure rate in the county is lower compared with other communities in California. But he is quick to point out that bank foreclosure houses rose, with 122 properties posted last month, an increase from 83 for the same month the previous year.

Other industry experts and economists said that volumes of foreclosure houses will flood the market soon as foreclosure moratoriums are lifted and banks will start to release bank foreclosed homes for sale.

Lesh said that currently, the housing market in the county could go down farther, admitting that the market has not yet reach the bottom and no dramatic increase in prices or sales are expected in the offing.

But other economists view the local residential real estate market with colored glasses, pointing out stability of home prices since March and dwindling of foreclosed houses for sale to give way to conventional home sales.

A national study of the foreclosure market showed that the metropolitan area of Kansas City in Missouri experienced a decline in foreclosure activity in the first six months of the year.

Industry experts said that commercial and bank owned foreclosure will continue to increase and dominate the real estate market in various regions in the country. Reports were recently released that supported this claim.

Many industry experts agree that the market is ripe for homebuyers and investors who want to buy properties on bank foreclosure list. First time homebuyers or investors are taking advantage of the low housing prices, reduced interest rates and tax incentives, according to experts.

The Washington Region should expect another flood of bank foreclosure homes this year until 2011. This is what real estate brokers concluded based on current trends, including rising unemployment rates, declining home market values and resetting of adjustable-rate mortgages.

Data from the Nevada Realtors Association’s study showed that majority of Bank Foreclosure Properties are primary residences. According to the study, the over 87 percent primary residences in the foreclosure listings does not coincide to popular opinion that majority of foreclosures are investment properties, which accounted for 3.6 percent, and 8.1 percent rental homes.

A report released by the IHS Global Insight, a forecasting firm, showed that property values in Southern California have sunk to a record low. And ongoing increase in bank foreclosure property and worsening economic situation are expected to pull down further home values in the area.

The Center for Responsible Learning (CRL) has estimated that properties added to bank foreclosure listings reached 1 million so far in 2009. This data do not bode well to the Obama Administration and the real estate industry’s efforts to fight foreclosures to stabilize and strengthen the housing market.