Homebuyers Just Browsing Foreclosure Listings

by Peter Vernon on General

It is the spring home selling season, and many sellers are encouraged by the rising number of prospective home buyers browsing foreclosed homes listings and looking at houses.

But based on interviews with buyers at open houses, many are still waiting for the market to reach its lowest level. A two-bedroom house in Brooklyn priced at $699,000 has been on foreclosure listings for over two months and has been examined by 14 buyers, but no one made a bid.

Housing analysts said many potential home buyers are confused by conflicting reports about the true estate of the housing market. Some reports showed the sales of existing homes declined by 3 percent in the first quarter while other reports showed that sales of new homes have bottomed out. Homebuyers also read about announcements by economists that home sales will recover about 6 months before housing prices reach a stable level.

Mark Zandi, the chief economist of Moody’s Economy.com, said that the home price decline will continue through the summer and will start to stabilize in the last quarter.

Last month, the median price tag for new homes dropped by 12 percent from March 2008 levels to $201,400. The median price tag for existing homes fell also by 12 percent from the same period to $168,200.

The speed of recovery for home sales and prices also varies by areas. According to the report released by The Associated Press and Re/Max, sales of new homes, existing homes and homes from foreclosure listings in February and in March have been rising at various rates in the country’s top 50 metropolitan areas.

Home sales in March increased compared to sales in March 2008. Most cities battered by foreclosure listings and bargain home prices, such as Las Vegas, San Diego, Phoenix, Los Angeles, Orlando and Miami, have home sales increases at rates over 50 percent compared to last year.

Meanwhile, in Cleveland, Ohio and in Detroit, Michigan, sales of homes including properties from foreclosure listings are still declining because of the departure of jobless workers looking for work in other states or cities.

While many prospective homebuyers are encouraged by bargain prices of homes in foreclosure listings and by the $8,000 tax credit, many others are worried about the rising number of bankrupt businesses and mass layoffs.

Nevertheless, many realtors are encouraged by the number of potential homebuyers showing interest in buying. According to the National Association of Realtors, first-time homebuyers comprised 50 percent of buyers of new homes, existing homes and homes from foreclosure listings sold in March.