Bank Foreclosures Sale Articles

Bank homes foreclosures in Los Angeles County still put a downward pressure on home prices, as shown in the drop in median prices of houses sold in January, despite a steady improvement in prices since April last year.

Based on sales data from HomeData, the median home sales price in the county dropped to $342,000 in January from the $348,000 median in December 2009. The median sales price for condos also dropped to $305,000 from the median of $315,000 in December.

The 8-percent drop in sales volume in January compared to December was normal, according to realtors, because buyers are still in the holiday mood. But the drop in home prices was not normal because home prices in the county have been steadily rising since April last year.

Nevertheless, the median sales price for single-family homes in January this year was higher than the $320,000 median in January 2009, but the $310,000 median price for condos last year was higher.

Analysts said that the rise in sales volume compared to January last year reflected the positive effect of the federal tax incentive for both first time buyers and move-up buyers.

A sense of optimism also pervaded analysts when they saw that the pace of pre foreclosures and foreclosure sales in California slowed down by 24 percent in the last quarter, compared to the third quarter. The default rate decline in the final quarter of 2009 is significant because it meant a slower rate of bank homes foreclosures in the first quarter this year.

In 2009, Los Angeles foreclosures stepped up from 2008 by more than 37 percent, reaching a total of 175,810 filings, representing 3.99 percent of all households in the Los Angeles metro area. The number of filings also marked an increase of 203.4 percent from filings in 2007.

These foreclosures pulled home prices down, including prices of properties in affluent communities. In January, homes in high-cost neighborhoods like Manhattan Beach, Beverly Hills and Brentwood that were previously priced at around $2 million were being sold at around $1.4 million.

Meanwhile, in low-cost neighborhoods, city and nonprofit officials are using Neighborhood Stabilization Program funds to repair fixer upper homes to prevent further erosion of prices. Recently, the city was allocated $100 million from the second NSP funding round to carry out its program. In addition, the Los Angeles Neighborhood Housing Services was also given $60 million to help rehabilitate bank homes foreclosures in struggling neighborhoods.

House foreclosures for sale in Jackson, Tennessee drove down home prices in the area in 2009, based on data from the Central West Tennessee Multiple Listing Service and local realtors.

The average home price in the area dropped in 2009 to $123,057, compared to the average home price of $137,706 in 2005. Aside from the downward price pressure of cheap houses, the price decline was also driven by the sharp drop in sales of homes priced above $250,000.

Total home sales last year also slowed down, compared to sales in 2008. Since 2005, sales have been on a decline. There were only 792 new and pre-owned homes sold last year in the area, down by 12 percent from sales in 2008.

According to Nashville-based real estate executive Tom Pierce, his company posted year-over-year improvements in sales starting July last year, but total sales were still low compared to sales in 2005. He said his firm sold 3,000 new and pre-owned homes last year, down from 5,000 homes sold in 2005.

Pierce also reported that house foreclosures for sale drove the performance of several of his company’s real estate teams last year, with foreclosed properties accounting for around 80 percent of their sales. He said that the more successful agents of the firm were focusing on bank repossessed homes.

Pierce said that the major factors affecting home sales are mortgage rates, available houses on the market and perceived future price appreciation. But he also noted that current unemployment and lack of confidence in the recovery of the job market remain the strongest hindrances to home buying.

Mahmoud Haddad, finance professor at the University of Tennessee in Martin, also insisted that unemployment remains the most crucial factor in home buying. He said that low mortgage rates mean nothing to people if they are unemployed or if they are uncertain about the security of their jobs.

Haddad believes that the unemployment rate in Jackson will still hover around the ten-percent level in 2010 despite the opening by Carlisle Tire & Wheel of its operations in Jackson. The jobless rate, meanwhile, in Madison County, where Jackson is located, reached 11 percent last December.

Home builders in Jackson are also suffering from the effects of the high jobless rate and record numbers of house foreclosures for sale. House builder Joel McAlexander said that many have stopped building new homes, and are now renting out their unsold properties to survive.

Foreclosure homes for sale in Las Vegas this year will be absorbed by the market because of continued demand from real estate investors, according to Dennis Smith, head of Home Builders Research.

Smith contended that the pace of Las Vegas foreclosures this year will not step up as fast as last year and that investors will push first time homebuyers away from the foreclosure market to the newly-constructed home market.

He said that sales of pre-owned homes will rise slightly to about 45,000 units this year, compared to the 44,885 units sold last year, and then will slow down to about 44,000 next year because of the increase in mortgage rates.

Smith also predicted that the prices of existing homes will climb up by over three percent this year to $127,000 and by a further 5.6 percent next year to $134,000. He explained though that any price increase will not be substantial in the next few years.

He expects the price median for new homes to jump by 2.8 percent to $220,000 this year, compared to $216,000 last year, and the number of home building permits to climb up to 4,400 from 3,850 permits in 2009.

Other analysts, however, and local realtors contend that foreclosure homes for sale will continue to grow substantially in Las Vegas this year. In December last year, the pace of foreclosures in the area jumped to 8.53 percent, a substantial increase from 4.2 percent the previous year and far above the nationwide rate of 3.16 percent, based on data from a foreclosure research firm based in Santa Ana, California.

The mortgage default rate also shot up last December, rising to 21.1 percent from the December 2009 rate of 11.9 percent. These troubled loans were seriously delinquent as they were in default by three months or more.

Local realtors also reiterated that the rise in interest rates, the stricter home buying guidelines of the Federal Housing Authority, job losses in the government sector and the resetting of adjustable mortgage loans will push further increases in repossessed homes in Las Vegas.

The plan by Bank of America to release to the market about 500 of its bank owned homes in Nevada this year is another pressure on the foreclosure market.

In 2009, Las Vegas posted the highest rate of foreclosure, with nearly 95,000 of its houses notified of delinquency and with a big percentage already counted as foreclosure homes for sale.

Illinois foreclosures pushed down the median home sales price statewide by 14.6 percent in 2009, based on data from the Illinois Association of Realtors.

Rockford foreclosures drove down home prices by up to 43 percent in 2009 as job losses in the area continued to push more homes into foreclosure.

Record Michigan foreclosures in 2009 reflected the dire unemployment situation in the state. In December, Michigan again posted the highest state unemployment rate – 14.6 percent – far above the jobless rate of the second-ranking state, which is Nevada with 13 percent, and the nationwide rate of 10 percent.

Cape Coral foreclosures dropped in January, a time more buyers are arriving in the area to look for homes. The first four months of the year are considered the home buying season in Florida because of the influx of out-of-state visitors during these months.

The pace of Texas foreclosures slowed in 2009, but may rise this year because of unemployment, according to the first issue of the Texas Quarterly Housing Report published by the Texas A&M University Real Estate Center.

Las Vegas foreclosures still dominated home resales in December last year despite a drop in the percentage of foreclosure sales in the area, based on sales data from a San Diego-based real estate information provider.

The pace of Roanoke foreclosures shot up by a staggering 353 percent in 2009 over a one-year period, surpassing the rates of increase in metro areas that have been dominating foreclosure charts since the start of the downturn, such as Las Vegas and other cities in the Sand States.