More Foreclosures for Sale Bring in Homebuyers

by Donald Hanz on Foreclosures

The number of residential foreclosures for sale continues to rise in the U.S., causing a parallel increase in the number of homebuyers in the country. Mississippi, California and Arizona are just three of the states recording increased interest from homebuyers.

According to nationwide statistics, the rising number of bank owned property listing contributed greatly to the rise in the number of homebuyers interested in putting their money down on foreclosed properties. These statistics also showed that the attraction of foreclosures to buyers lies primarily on low market costs, the existence of federal credit and less interest charges.

Reports on the nation’s housing markets also showed that certain cities like Phoenix, Las Vegas and San Bernardino in California have produced a huge market of cheap houses never before seen in real estate for years. The current condition of the housing industry has gotten a lot of interest from homebuyers, creating multiple bids on residential properties.

Bidders are reportedly most interested in homes that are part of a bank owned property listing since such properties have declined in prices to as low as 50% of their original value. In some cases, dwellings are sold at very low prices that they only equal the amount spent on constructing the homes. Bank owned foreclosures also account for the highest percentage of properties in foreclosure listings.

Real estate market experts have also reported that the emergence of a big number of cheap houses has made it more difficult for homeowners to sell their homes due to tight competition in terms of available residential properties offered at very low rates. The trend, according to market experts, can possibly create a new wave of foreclosures since a lot of troubled homeowners are finding it difficult to sell their homes at regular rates.

Foreclosures for sale accounted for more than a third of the total dwellings sold during the month of May, according to the National Association of Realtors. The association also revealed that there had been a drop of over 16% in the median prices of homes compared with previous year’s rates. Current prices of residential properties have become comparable to prices of houses in 2000, particularly in several areas of California, the association has added.

Meanwhile, housing markets in South Florida and several areas of Nevada are selling dwellings at rates comparable to 2003 market values. These pricing trends have resulted in real estate market observers offering a warning that the foreclosure crisis may well continue for another year or so. They also added that the rising unemployment rates and rising average mortgage rates are not doing anything to help residential real estate achieve a recovery.

According to recent reports, housing markets that are great sources of cheap houses include Mississippi, Riverside and San Bernardino in California, Las Vegas and South Florida. The reports also stated that most cities and states that were hardest hit by the housing crisis are producing the cheapest properties in the market.

The rising number of foreclosures for sale in the U.S. is creating a housing market comprised of cheap properties. Real estate observers have warned that very low housing prices can create a new wave of foreclosure in the U.S.

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