Albuquerque Foreclosure Homes Cut Down Prices, Drove Sales

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Albuquerque foreclosure homes pushed down house prices and drove more sales in February, based on data from the Greater Albuquerque Association of Realtors.

Total sales of previously owned homes increased to 380 units in February this year, a 10.8-percent jump from sales in February 2009. The sales meant a sharp increase in revenues to $78.5 million, a jump of 9.2 percent from sales revenues in 2009. Pending sales also jumped up to 779 transactions, an increase of 47 percent year-over-year.

Sales increased as home buyers took advantage of the federal tax incentives, the low mortgage rates and the lower home prices. The average house price in February was $206,600, down from $226,343 in February 2009.

Within the Albuquerque area, Rio Rancho has the most improvement in sales in February.

In January, the pace of foreclosure filings in Albuquerque surged to 2.4 percent of all mortgaged homes, a sharp jump from the January 2009 rate of 1.36 percent, according to a report from a research firm.

The default rate in the area also increased to 6.33 percent, up by 2.9 percentage points compared to 3.44 percent in January last year. Defaults counted were mortgages late in payments by three months or more.

Local analysts said that the major causes of the surge in Albuquerque foreclosure homes were unemployment and the adjustment of exotic mortgages to higher mortgage rates. They said that just like in many other places in the country, lenders approved almost all home loan applicants without applying their screening policies for mortgage borrowers.

The pace of New Mexico foreclosures also soared as mortgage defaults nearly doubled in the last two years, based on reports from the Mortgage Bankers Association and the New Mexico Mortgage Lenders Association. Homebuyers have lots of opportunities to search foreclosed homes for sale in New Mexico as the state foreclosure rate tripled from only 1.03 percent in December 2007 to 2.99 in December 2009.

About 7,500 households entered the foreclosure process in New Mexico in 2009.

Bill Elliott, manager of Rocky Mountain Mortgage and previous head of the state realtor association, said that job loss is the main cause of defaults and foreclosures in the state. He added that the percentage of strategic defaults has also been rising.

According to Elliott, foreclosure activity will continue to surge in 2010 because of continued economic difficulties. He contended that the pace of Albuquerque foreclosure homes will wane in the middle or latter part of 2011.

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