Foreclosure Tax Lien Sales Continue to Hammer Home Prices

by on Foreclosures

With a lot of cheap bank foreclosures and foreclosed tax lien sales to compete with, most regular home sellers have no choice but to lower their asking prices just to get buyers to sign purchase agreements. In Texas, several areas have recorded rising home sales in February, although prices have declined from year-ago levels.

The oversupply of foreclosed homes in Dallas and distressed properties in various markets of Texas has affected home prices all over the region, even in areas where foreclosures might not be as much a problem as in bigger metro areas. In the communities of Deer Park and Pasadena, February 2011 housing data released by the Houston Association of Realtors showed a rise in sales, but a decline in prices.

In Pasadena, a total of 76 housing units were sold in February of this year; up from the February 2010 total of 72. Prices, however, declined by over 6% year-over-year as the average selling rate for homes sold during the month dropped to $97,000. Local analysts are attributing the drop in prices partly on the presence of low-priced foreclosed homes for sale in Texas. Meanwhile, the same trend was recorded in Deer Park, with sales rising and home prices decreasing during the month.

Deer Park had a total of 19 housing units sold in February 2011. This might not be much, but it still represented an increase from the same 2010 month, when only 17 units were sold. Like in Pasadena, bank foreclosures and foreclosure tax lien sales also caused prices to drop in Deer Park, with the average selling rate for February going down to $118,000.

Housing data for February in all Houston markets covered by the realtors association showed a reversed trend, with the number of non-foreclosed and home foreclosures for sale purchased by buyers totaling 3,257 for the month; down by 2.2% from year-ago levels, while average prices rose by 3.9% over the same period to reach $151,900 in February of this year. In terms of inventory, Pasadena currently has a total of 516 residential units available for sale, while Deer Park has a total of 176.

Local analysts stated that housing figures for February are quite encouraging, given that last year's numbers were highly inflated by the tax credit incentive. They also stated that despite the presence of foreclosures and tax lien sales, prices and sales will likely stabilize in the coming months, owing to a stronger job market and the anticipated return of buyers for the spring house buying season.