A record 269,962 U.S. homes were seized from delinquent owners in the second quarter as lenders set a pace to claim more than 1 million properties by the end of 2010, according to RealtyTrac Inc.
Home seizures climbed 38 percent from a year earlier and 5 percent from the first quarter, the Irvine, California-based data company said today in a statement. More than 1.65 million properties received a foreclosure filing, including notices of default, auction and bank repossession, in the first half. That was up 8 percent from the first six months of 2009.
“Foreclosures haven’t peaked yet,” Nicolas Retsinas, director of Harvard University’s Joint Center for Housing Studies in Cambridge, Massachusetts, said in a telephone interview. Unemployment suggests that bank repossessions may climb for another six to nine months, he said.
Waning consumer confidence and the jobless rate, which was 9.5 percent in June, are holding back a housing recovery. The expiration of a federal tax credit for homebuyers also cut demand, even as average borrowing costs for a 30-year fixed-rate loan set record lows. The rate was 4.57 percent last week, according to McLean, Virginia-based mortgage finance company Freddie Mac.
“It’s not interest rates that will get us out of this, but jobs,” Retsinas said. “New defaults seem to have stabilized, but there’s still a lot of volatility overall.”
One in 78 U.S. households received a foreclosure filing in the first half, and filings surpassed 300,000 for the 16th consecutive month in June, RealtyTrac said. A total of 529,633 homes were seized by lenders -- the last stage of the foreclosure process -- in the first half, said Daren Blomquist, the data firm’s marketing manager.
Clearing Backlog
Banks are trying to avert foreclosure in some cases by modifying loans or attempting short sales, where a property is sold for less than the amount owed. That’s pushing down the number of new default notices even as lenders “cleared out a backlog” and seized more homes, James J. Saccacio, RealtyTrac’s chief executive officer, said in the statement.
The number of properties that got a filing from April through June totaled 895,521, a 4 percent drop from the previous quarter and little changed from a year earlier. Total filings for the year are forecast to exceed 3 million, according to the data company.
“While the foreclosure problem is being managed on the surface, a massive number of distressed properties and underwater loans continues to sit just below the surface, threatening the fragile stability of the housing market,” Saccachio said.
Nevada, Arizona
Nevada had the highest foreclosure rate, as one in 17 households received a filing in the first half. The number of properties that got a notice totaled 64,429, down 13 percent from the previous six months and 6 percent from a year earlier.
Arizona ranked second at one in 30 households and Florida was third at one in 32. Rounding out the 10 highest rates were California, Utah, Georgia, Michigan, Idaho, Illinois and Colorado.
California led in total filings as 340,740 properties got a notice, down 15 percent from the previous six months and almost 13 percent from a year earlier, according to RealtyTrac.
Florida was second with 277,073 properties, down 9 percent from the previous six months and up 3 percent from the first half of 2009. Arizona was third at 91,484, down almost 2 percent from the previous period and up by a similar proportion from a year earlier.
Other states among the 10 highest totals were Illinois at 85,223; Michigan at 78,509; Georgia at 71,949; Texas at 64,883; Nevada at 64,429; Ohio at 59,927; and New Jersey at 36,542.
By Dan Levy - Jul 15, 2010
RealtyTrac sells default data from more than 2,200 counties representing 90 percent of the U.S. population.
If your worried about foreclosure American Eagle Realty can help you with solid answers about your rights and options before your house is foreclosed on! We are experts in the Short Sale Process and have the experience needed to work with your bank! Contact us we can help.....
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Thursday, July 22, 2010
Tuesday, July 20, 2010
Mortgage modifications jump 15% but more than 40% leave program
The total number of homeowners getting permanent mortgage modifications under the Obama Administration's program increased nearly 15% in June, but a large number of borrowers are being ousted from the program.
Growth in permanent modifications have averaged more than 50,000 per month over the last six months, according to a report Tuesday by the Treasury Department. A total of 530,000 homeowners, which amounts to about 40% of borrowers, have had their permanent modifications canceled.
REPORT:Mortgage modification program through June 2010
SCORECARD: Efforts to help American homeowners
Borrowers may be removed from the program for not providing proper documentation such as proof of income.
A total of 389,198 homeowners have gotten permanent modifications.
"It's good. The housing market and economy are starting to resolve the issues, though it's going to take years," says Joel Naroff, with Naroff economic Advisors. "It's helping. It's working to some extent."
For the first time, the government also included information on how many borrowers with modifications are re-defaulting. For permanent modifications that have been in place for six months, fewer than 6% are 60 or more days delinquent. Fewer than 3% of homeowners in permanent modifications at nine months have defaulted on their modification.
The low re-default rate may be because borrowers who were going to be unable to make payments defaulted earlier in the program, economists say. It could also be that the job market is stronger today so fewer homeowners are losing their jobs and sources of income.
"Now a lot of people getting modifications are keeping their jobs," Naroff says, adding that more stable home prices also provide an incentive to remain current on payments. "And they're not losing equity. Indeed, it may be going up."
Homeowners in permanent modifications are guaranteed lower payments for five years, then fixed terms at today's low rates for the life of the loan. Those in the permanent modifications experience a median payment reduction of 36%, more than $500 per month.
Homeowners get a temporary modification for three months. If they remain current on those payments during that time, they are then moved into a permanent modification.
All borrowers get interest rate reductions, but about 56% also get a term extension on their loan. Another 29.1% have gotten reduction in principal. The predominant reason homeowners seek a modification is loss of income.
Changes in the program, such as expanding it to allow for more principal reduction and incentives for short sales, may make it more widely used in coming months.
"(The program) is not helping a lot of people, but for those that have gotten it, it seems to be working reasonably well," says Mark Zandi, with Moody's Analytics. "The problem is not a lot of people are getting it."
By Stephanie Armour, USA TODAY
If your worried about foreclosure American Eagle Realty can help you with solid answers about your rights and options before your house is foreclosed on! We are experts in the Short Sale Process and have the experience needed to work with your bank! Contact us we can help.....
American Eagle Realty
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Growth in permanent modifications have averaged more than 50,000 per month over the last six months, according to a report Tuesday by the Treasury Department. A total of 530,000 homeowners, which amounts to about 40% of borrowers, have had their permanent modifications canceled.
REPORT:Mortgage modification program through June 2010
SCORECARD: Efforts to help American homeowners
Borrowers may be removed from the program for not providing proper documentation such as proof of income.
A total of 389,198 homeowners have gotten permanent modifications.
"It's good. The housing market and economy are starting to resolve the issues, though it's going to take years," says Joel Naroff, with Naroff economic Advisors. "It's helping. It's working to some extent."
For the first time, the government also included information on how many borrowers with modifications are re-defaulting. For permanent modifications that have been in place for six months, fewer than 6% are 60 or more days delinquent. Fewer than 3% of homeowners in permanent modifications at nine months have defaulted on their modification.
The low re-default rate may be because borrowers who were going to be unable to make payments defaulted earlier in the program, economists say. It could also be that the job market is stronger today so fewer homeowners are losing their jobs and sources of income.
"Now a lot of people getting modifications are keeping their jobs," Naroff says, adding that more stable home prices also provide an incentive to remain current on payments. "And they're not losing equity. Indeed, it may be going up."
Homeowners in permanent modifications are guaranteed lower payments for five years, then fixed terms at today's low rates for the life of the loan. Those in the permanent modifications experience a median payment reduction of 36%, more than $500 per month.
Homeowners get a temporary modification for three months. If they remain current on those payments during that time, they are then moved into a permanent modification.
All borrowers get interest rate reductions, but about 56% also get a term extension on their loan. Another 29.1% have gotten reduction in principal. The predominant reason homeowners seek a modification is loss of income.
Changes in the program, such as expanding it to allow for more principal reduction and incentives for short sales, may make it more widely used in coming months.
"(The program) is not helping a lot of people, but for those that have gotten it, it seems to be working reasonably well," says Mark Zandi, with Moody's Analytics. "The problem is not a lot of people are getting it."
By Stephanie Armour, USA TODAY
If your worried about foreclosure American Eagle Realty can help you with solid answers about your rights and options before your house is foreclosed on! We are experts in the Short Sale Process and have the experience needed to work with your bank! Contact us we can help.....
American Eagle Realty
www.american-eagle-realty.com
502-969-1801
Friday, July 16, 2010
Foreclosures in U.S. Reach a Record High! ------What Recovery?
Foreclosures in U.S. reach a record high
By ALEJANDRO LAZO - Los Angeles Times
LOS ANGELES -- The number of U.S. homes taken back by banks through foreclosure hit a record high in the second quarter, even as lenders delayed more homes from entering the process through short sales and loan modification efforts, according to data to be released Thursday.
This growing supply of lender-owned properties could set back the nation's housing recovery but probably won't sink it completely if the nation's employment situation doesn't deteriorate further and the economy begins to pick up steam, experts said. Sales of homes have faltered nationally in recent months with the expiration of government tax incentives for buyers.
U.S. bank repossessions increased 38 percent in the second quarter from the same period a year earlier for a record total of 269,952, according to Irvine, Calif., research firm RealtyTrac. That was also a jump of 5 percent from the previous quarter. If that pace continues through the year, the number of homes taken by banks is likely to top 1 million by the end of 2010, said Rick Sharga, RealtyTrac senior vice president.
More than 1 million American households are likely to lose their homes to foreclosure this year, as lenders work their way through a huge backlog of borrowers who have fallen behind on their loans.
Nearly 528,000 homes were taken over by lenders in the first six months of the year, a rate that is on track to eclipse the more than 900,000 homes repossessed in 2009, according to data released Thursday by RealtyTrac Inc., a foreclosure listing service.
"That would be unprecedented," said Rick Sharga, a senior vice president at RealtyTrac.
Millions of Americans are still likely to lose their homes in the coming years, but the foreclosure crisis is finally showing signs of subsiding.
The number of households facing foreclosure in April fell 2 percent from a year ago, the first annual decline in five years, RealtyTrac Inc. said Thursday.
But the data aren't all sunny. While the number of new delinquencies is dropping, the number of borrowers losing their homes is still rising. Banks seized a record 92,000 homes last month.
The number of U.S. households facing foreclosure in January increased 15 percent from the same month last year, and a surge in cash-strapped homeowners who've fallen behind on mortgages could be on the way.
More than 315,000 households received a foreclosure-related notice in January, RealtyTrac Inc. reported Thursday. That number is down nearly 10 percent from 349,000 in December.
In January, one in 409 homes was sent a filing, which includes default notices, scheduled foreclosure auctions and bank repossessions. Banks repossessed more than 87,000 homes last month, down 5 percent from December but still up 31 percent from January 2009.
Foreclosures are likely to be a part of the real estate market for several years, but opinions about distressed properties are shifting, according to a study released this week.
Realty Trac, a company that tracks foreclosures nationwide, teamed with Trulia Inc., a real estate website, to study foreclosure opinions in the United States.
The study, conducted for the companies by Harris Interactive, found that fewer potential home buyers would consider buying a foreclosure than last year and fewer survey takers had negative opinions about foreclosures.
Foreclosures increased in Horry and Georgetown counties in March, and officials say they don't expect to see a decline any time soon.
In March, foreclosures in Horry County were up 8percent from the same month last year and up 50 percent in Georgetown County, according to data released this week by Realty Trac, a company that tracks foreclosures across the United States.
There was a 129 percent jump in foreclosures in the first three months of the year in Georgetown when compared with the previous three months, and a 50 percent increase from the same months last year.
"It is almost a certainty that we will see over a million over the course of the year, and that would definitely be a record," he said. "It's serious, but it doesn't appear to be that these levels will crater the housing market if the economy at least stabilizes and we do start to see some job creation."
A total of 895,521 foreclosure notices were filed on U.S. properties during the second quarter, an increase of less than 1 percent from the same quarter a year earlier and a 4 percent decrease from the first quarter, according to RealtyTrac. Notices of default - the first stage of the foreclosure process - were down 19 percent from the same quarter a year earlier and 11 percent from the first quarter.
"What is happening is that the number of loans that are going into delinquency is abating, but the number of loans that are moving through the foreclosure process is rising," said Mark Zandi, chief economist for Moody's Economy.com. "This is because many loans got piled up in the foreclosure process as mortgage servicers tried to figure out all the various loan modification plans and policy efforts to mitigate foreclosure activity. Now, at this point, servicers are figuring out these programs and are starting to push loans through the process."
Because housing has stabilized and banks have improved their financial positions since the start of the financial crisis, regulators are pressing them to get rid of their troubled loans.
"There is growing pressure on the banks to get problem residential loans worked out one way or another," said Bert Ely, an independent banking consultant. "And the sense is that, in most markets, we are through the worst of it to the extent the economy improves at all."
In California, foreclosure filings totaled 192,422 in the second quarter, a 24 percent decrease from the same quarter a year earlier and an 11 percent drop from the first three months of the year. Notices of default were down 43 percent from a year earlier and 15 percent from the first three months of the year.
California also appears to be bucking the trend in bank seizures, with that number up only 1 percent at the end of the second quarter from the year-earlier quarter and down 1.5 percent from the first quarter. That relatively moderate increase is probably because banks are purposely postponing the auctions of homes to keep a flood of properties off the market, Sharga said, and will not last forever.
"California might be too saturated, in terms of what the banks are willing to put on their books right now," he said. "You will definitely see it coming later.
"Because of how out of control the prices and lending practices got during the boom, and now because of high levels of unemployment, California is probably going to be at the center of the foreclosure crisis until it's over," Sharga said.
Read more: http://www.thesunnews.com/2010/07/15/1586960/foreclosures-in-us-reach-a-record.html#ixzz0tl5ofcKL
If your worried about foreclosure American Eagle Realty can help you with solid answers about your rights and options before your house is foreclosed on! We are experts in the Short Sale Process and have the experience needed to work with your bank! Contact us we can help.....
American Eagle Realty
www.american-eagle-realty.com
502-969-1801
By ALEJANDRO LAZO - Los Angeles Times
LOS ANGELES -- The number of U.S. homes taken back by banks through foreclosure hit a record high in the second quarter, even as lenders delayed more homes from entering the process through short sales and loan modification efforts, according to data to be released Thursday.
This growing supply of lender-owned properties could set back the nation's housing recovery but probably won't sink it completely if the nation's employment situation doesn't deteriorate further and the economy begins to pick up steam, experts said. Sales of homes have faltered nationally in recent months with the expiration of government tax incentives for buyers.
U.S. bank repossessions increased 38 percent in the second quarter from the same period a year earlier for a record total of 269,952, according to Irvine, Calif., research firm RealtyTrac. That was also a jump of 5 percent from the previous quarter. If that pace continues through the year, the number of homes taken by banks is likely to top 1 million by the end of 2010, said Rick Sharga, RealtyTrac senior vice president.
More than 1 million American households are likely to lose their homes to foreclosure this year, as lenders work their way through a huge backlog of borrowers who have fallen behind on their loans.
Nearly 528,000 homes were taken over by lenders in the first six months of the year, a rate that is on track to eclipse the more than 900,000 homes repossessed in 2009, according to data released Thursday by RealtyTrac Inc., a foreclosure listing service.
"That would be unprecedented," said Rick Sharga, a senior vice president at RealtyTrac.
Millions of Americans are still likely to lose their homes in the coming years, but the foreclosure crisis is finally showing signs of subsiding.
The number of households facing foreclosure in April fell 2 percent from a year ago, the first annual decline in five years, RealtyTrac Inc. said Thursday.
But the data aren't all sunny. While the number of new delinquencies is dropping, the number of borrowers losing their homes is still rising. Banks seized a record 92,000 homes last month.
The number of U.S. households facing foreclosure in January increased 15 percent from the same month last year, and a surge in cash-strapped homeowners who've fallen behind on mortgages could be on the way.
More than 315,000 households received a foreclosure-related notice in January, RealtyTrac Inc. reported Thursday. That number is down nearly 10 percent from 349,000 in December.
In January, one in 409 homes was sent a filing, which includes default notices, scheduled foreclosure auctions and bank repossessions. Banks repossessed more than 87,000 homes last month, down 5 percent from December but still up 31 percent from January 2009.
Foreclosures are likely to be a part of the real estate market for several years, but opinions about distressed properties are shifting, according to a study released this week.
Realty Trac, a company that tracks foreclosures nationwide, teamed with Trulia Inc., a real estate website, to study foreclosure opinions in the United States.
The study, conducted for the companies by Harris Interactive, found that fewer potential home buyers would consider buying a foreclosure than last year and fewer survey takers had negative opinions about foreclosures.
Foreclosures increased in Horry and Georgetown counties in March, and officials say they don't expect to see a decline any time soon.
In March, foreclosures in Horry County were up 8percent from the same month last year and up 50 percent in Georgetown County, according to data released this week by Realty Trac, a company that tracks foreclosures across the United States.
There was a 129 percent jump in foreclosures in the first three months of the year in Georgetown when compared with the previous three months, and a 50 percent increase from the same months last year.
"It is almost a certainty that we will see over a million over the course of the year, and that would definitely be a record," he said. "It's serious, but it doesn't appear to be that these levels will crater the housing market if the economy at least stabilizes and we do start to see some job creation."
A total of 895,521 foreclosure notices were filed on U.S. properties during the second quarter, an increase of less than 1 percent from the same quarter a year earlier and a 4 percent decrease from the first quarter, according to RealtyTrac. Notices of default - the first stage of the foreclosure process - were down 19 percent from the same quarter a year earlier and 11 percent from the first quarter.
"What is happening is that the number of loans that are going into delinquency is abating, but the number of loans that are moving through the foreclosure process is rising," said Mark Zandi, chief economist for Moody's Economy.com. "This is because many loans got piled up in the foreclosure process as mortgage servicers tried to figure out all the various loan modification plans and policy efforts to mitigate foreclosure activity. Now, at this point, servicers are figuring out these programs and are starting to push loans through the process."
Because housing has stabilized and banks have improved their financial positions since the start of the financial crisis, regulators are pressing them to get rid of their troubled loans.
"There is growing pressure on the banks to get problem residential loans worked out one way or another," said Bert Ely, an independent banking consultant. "And the sense is that, in most markets, we are through the worst of it to the extent the economy improves at all."
In California, foreclosure filings totaled 192,422 in the second quarter, a 24 percent decrease from the same quarter a year earlier and an 11 percent drop from the first three months of the year. Notices of default were down 43 percent from a year earlier and 15 percent from the first three months of the year.
California also appears to be bucking the trend in bank seizures, with that number up only 1 percent at the end of the second quarter from the year-earlier quarter and down 1.5 percent from the first quarter. That relatively moderate increase is probably because banks are purposely postponing the auctions of homes to keep a flood of properties off the market, Sharga said, and will not last forever.
"California might be too saturated, in terms of what the banks are willing to put on their books right now," he said. "You will definitely see it coming later.
"Because of how out of control the prices and lending practices got during the boom, and now because of high levels of unemployment, California is probably going to be at the center of the foreclosure crisis until it's over," Sharga said.
Read more: http://www.thesunnews.com/2010/07/15/1586960/foreclosures-in-us-reach-a-record.html#ixzz0tl5ofcKL
If your worried about foreclosure American Eagle Realty can help you with solid answers about your rights and options before your house is foreclosed on! We are experts in the Short Sale Process and have the experience needed to work with your bank! Contact us we can help.....
American Eagle Realty
www.american-eagle-realty.com
502-969-1801
Thursday, July 15, 2010
Home Sellers Slashing Prices, While Banks Mow the Lawn
That heady buzz from the home buyer tax credit is now turning into a grinding headache, as home sellers realize their very temporary, government-induced catbird seat has now fallen back to earth.
As of July 1st, 24 percent of sellers on the market had cut their asking prices at least once, according to Trulia.com.
That's up 9 percent from the previous month and represents about $27 billion worth of vanished national home equity (or home equity hopes).
"The market is going to maintain a relatively flat trajectory, if not more like a saw tooth trajectory, for the near future, and meaningful recovery may not happen until some time in 2011, 2012," says Trulia's Heather Fernandez.
Shocking? Not so much.
We knew the price stabilization was largely due to increased buying activity on the low end from the home buyer tax credit. The issue now, front and center, is foreclosures. We've already seen a few reports, and I expect we'll see more, that show new foreclosures "stabilizing," while bank repossessions are increasing.
First of all, the stabilization is at such a high rate that it's clearly an unsustainable stabilization for the economic recovery. New foreclosure notices need to drop, not just bump around at their near-record highs. And frankly the bank repossession number is a much bigger deal, because that is going to translate into immediate inventory on the market.
Do banks hold on to foreclosure inventory?
Of course they do, but in Los Angeles at least, they're getting a big incentive to dump it fast. L.A. last week passed a new city ordinance that fines banks, servicers, whoever owns the foreclosed property, up to $100,000 for letting the property fall into disrepair. We've heard and seen plenty of stories about run-down, stripped homes littering the landscape, with their overgrown lawns and broken front fences standing as glaring examples of what is not recovering in the housing market.
I wouldn't be surprised if more big cities do the same, and I'd encourage them to do so.
Let's face it, banks don't want to be homeowners, and they certainly don't want to shell out even more of their dwindling cash on lawn services and handymen. Whatever incentives there are out there to turn these properties over to homeowners who can actually afford them are certainly welcome.
The trouble is that there appears to be a dangerous disconnect in the housing market right now: Housing starts are at an all-time low and yet the home vacancy rate is rising. The only way that can happen is if the number of households is shrinking more than we know. Add bank repossessed homes to that mix, and I'm guessing home prices will dip more than some are expecting.
CNBC On Wednesday July 14, 2010, 12:38 pm EDT
If your worried about foreclosure American Eagle Realty can help you with solid answers about your rights and options before your house is foreclosed on! We are experts in the Short Sale Process and have the experience needed to work with your bank! Contact us we can help.....
American Eagle Realty
www.american-eagle-realty.com
502-969-1801
As of July 1st, 24 percent of sellers on the market had cut their asking prices at least once, according to Trulia.com.
That's up 9 percent from the previous month and represents about $27 billion worth of vanished national home equity (or home equity hopes).
"The market is going to maintain a relatively flat trajectory, if not more like a saw tooth trajectory, for the near future, and meaningful recovery may not happen until some time in 2011, 2012," says Trulia's Heather Fernandez.
Shocking? Not so much.
We knew the price stabilization was largely due to increased buying activity on the low end from the home buyer tax credit. The issue now, front and center, is foreclosures. We've already seen a few reports, and I expect we'll see more, that show new foreclosures "stabilizing," while bank repossessions are increasing.
First of all, the stabilization is at such a high rate that it's clearly an unsustainable stabilization for the economic recovery. New foreclosure notices need to drop, not just bump around at their near-record highs. And frankly the bank repossession number is a much bigger deal, because that is going to translate into immediate inventory on the market.
Do banks hold on to foreclosure inventory?
Of course they do, but in Los Angeles at least, they're getting a big incentive to dump it fast. L.A. last week passed a new city ordinance that fines banks, servicers, whoever owns the foreclosed property, up to $100,000 for letting the property fall into disrepair. We've heard and seen plenty of stories about run-down, stripped homes littering the landscape, with their overgrown lawns and broken front fences standing as glaring examples of what is not recovering in the housing market.
I wouldn't be surprised if more big cities do the same, and I'd encourage them to do so.
Let's face it, banks don't want to be homeowners, and they certainly don't want to shell out even more of their dwindling cash on lawn services and handymen. Whatever incentives there are out there to turn these properties over to homeowners who can actually afford them are certainly welcome.
The trouble is that there appears to be a dangerous disconnect in the housing market right now: Housing starts are at an all-time low and yet the home vacancy rate is rising. The only way that can happen is if the number of households is shrinking more than we know. Add bank repossessed homes to that mix, and I'm guessing home prices will dip more than some are expecting.
CNBC On Wednesday July 14, 2010, 12:38 pm EDT
If your worried about foreclosure American Eagle Realty can help you with solid answers about your rights and options before your house is foreclosed on! We are experts in the Short Sale Process and have the experience needed to work with your bank! Contact us we can help.....
American Eagle Realty
www.american-eagle-realty.com
502-969-1801
Wednesday, July 14, 2010
Housing Double Dip Appears To Be Underway
Home values slide again in 2010, with few exceptions. by Stephane Fitch
The final figures for the U.S. housing market's performance thus far in 2010 won't be officially released for several weeks. But a review of the best preliminary data available indicates that the recovery in home values that began in early 2009 has stalled. A second dip is clearly under way in some places, if not across the entire U.S.
Zillow.com, a Seattle-based real estate data provider, is preparing to release figures for May and expects them to show a 1.7% decline in home values nationally through the first five months. The pain is spread unevenly across the landscape, with home values in cities like San Diego, Los Angeles and Boston rising 2% to 4% while prices in Las Vegas, Miami and elsewhere tumbled 6% to 7%.
New York-based data firm Radar Logic, which tracks values by sifting through housing transactions in the 25 largest U.S. cities, reports that through April 30 values were up 1.9%. It warns, however, that values may have merely received a boost from the spring season (home values typically have their best stretch as the weather warms) and the extension of the first-time-buyer tax credit that expired last month. Its index will likely hit new lows in the second half of the year, Radar Logic says.
In a report released last month analysts at investment bank Goldman Sachs ( GS - news - people ) said their own review of housing data available at the time showed 2009's recovery in values had stalled. U.S. housing values will fall 3% in the coming year, with the heaviest blows dealt to Las Vegas, Portland, Ore. and Seattle, Goldman predicts. With an eye toward high home-vacancy rates or rising mortgage delinquencies in these cities, the bankers projected values there would drop 4% to 12% in the coming 12 months.
Even if the darkest forecasts don't come true, the slippage so far this year is discouraging. Many homeowners had been hoping that home values would rise again this spring like they did in the spring of 2009 (they rose 8% between March 30 and mid-August, by Radar Logic's measure). That clearly hasn't happened during the most recent house-hunting season.
The banks are very reluctant to foreclose on many delinquencies because they would end up owning too much real estate without being able to sell it down the road. I believe that the vast majority
"Some metro areas did pretty well," says Zillow.com economist Stan Humphries, noting that Los Angeles, San Francisco and San Diego were up 3% or more through the end of May and that Boston and Denver also were both up year to date. "It's an otherwise dreary backdrop," Humphries adds.
In the housing downswing that plagued the U.S. in the early 1990s, home values fell in real terms, but inflation rates ran between 3% and 5%, which helped camouflage the modest retreat. No such luck now. With inflation running at just 2%, any slip in value greater than that is painfully apparent to homeowners.
"In nominal terms, we haven't had a price drop like this nationally since the Great Depression," says Humphries.
"I'm not sure you can even call this a double-dip, because I'm not sure we ever got out of the first dip," says Radar Logic Chief Executive Michael Feder. "Last year I think buyers moved in because prices were so low, but we've seen such a massive inflow of supply because of foreclosures and the big inventory of foreclosures to come. It's really affecting the comfort that buyers have in the prices they're paying."
Barclays Capital has estimated the number of homes in the hands of lenders, whether Fannie Mae ( FNM - news - people ), Freddie Mac ( FRE - news - people ) or any of the large private banks, is approaching 500,000. More than 200,000 of those homes are in the hands of the government lenders.
"They're the fastest-growing seller of foreclosed homes in the country right now," notes Feder.
Alarmed by the 11 million or so mortgages that are reportedly delinquent, Feder and others have been lobbying government officials to consider alternative plans to rescue housing. Feder favors a plan that would allow Fannie, Freddie and other banks to convert their underwater mortgages to shared-appreciation mortgages that would carry lower monthly payments and give banks and homeowners shared equity stakes in the homes' future appreciation.
One way or another the market must clear, and as it has so often in the past, California appears to be leading the way. Los Angeles, San Diego and San Francisco have all had respectable years thus far. Part of the reason is that state law enables the parties involved to work through foreclosures in as little as 90 days.
"Contrast that with Florida, where getting possession can take several more months," says Humphries.
Prices in Miami are down 6.9% this year, according to Zillow.com
Kentucky down -3.9% to $101600
Indiana up 1.0 % to $ 134,900
Ohio down-3.6 % to $ 130,000
Missouri down-.01 % to $ 149,900
Tennessee down-0.6 % to $ 168,900
West Va. down 0.0 % to $ 149,900
If your worried about foreclosure American Eagle Realty can help you with solid answers about your rights and options before your house is foreclosed on! We are experts in the Short Sale Process and have the experience needed to work with your bank! Contact us we can help.....
American Eagle Realty
www.american-eagle-realty.com
502-969-1801
The final figures for the U.S. housing market's performance thus far in 2010 won't be officially released for several weeks. But a review of the best preliminary data available indicates that the recovery in home values that began in early 2009 has stalled. A second dip is clearly under way in some places, if not across the entire U.S.
Zillow.com, a Seattle-based real estate data provider, is preparing to release figures for May and expects them to show a 1.7% decline in home values nationally through the first five months. The pain is spread unevenly across the landscape, with home values in cities like San Diego, Los Angeles and Boston rising 2% to 4% while prices in Las Vegas, Miami and elsewhere tumbled 6% to 7%.
New York-based data firm Radar Logic, which tracks values by sifting through housing transactions in the 25 largest U.S. cities, reports that through April 30 values were up 1.9%. It warns, however, that values may have merely received a boost from the spring season (home values typically have their best stretch as the weather warms) and the extension of the first-time-buyer tax credit that expired last month. Its index will likely hit new lows in the second half of the year, Radar Logic says.
In a report released last month analysts at investment bank Goldman Sachs ( GS - news - people ) said their own review of housing data available at the time showed 2009's recovery in values had stalled. U.S. housing values will fall 3% in the coming year, with the heaviest blows dealt to Las Vegas, Portland, Ore. and Seattle, Goldman predicts. With an eye toward high home-vacancy rates or rising mortgage delinquencies in these cities, the bankers projected values there would drop 4% to 12% in the coming 12 months.
Even if the darkest forecasts don't come true, the slippage so far this year is discouraging. Many homeowners had been hoping that home values would rise again this spring like they did in the spring of 2009 (they rose 8% between March 30 and mid-August, by Radar Logic's measure). That clearly hasn't happened during the most recent house-hunting season.
The banks are very reluctant to foreclose on many delinquencies because they would end up owning too much real estate without being able to sell it down the road. I believe that the vast majority
"Some metro areas did pretty well," says Zillow.com economist Stan Humphries, noting that Los Angeles, San Francisco and San Diego were up 3% or more through the end of May and that Boston and Denver also were both up year to date. "It's an otherwise dreary backdrop," Humphries adds.
In the housing downswing that plagued the U.S. in the early 1990s, home values fell in real terms, but inflation rates ran between 3% and 5%, which helped camouflage the modest retreat. No such luck now. With inflation running at just 2%, any slip in value greater than that is painfully apparent to homeowners.
"In nominal terms, we haven't had a price drop like this nationally since the Great Depression," says Humphries.
"I'm not sure you can even call this a double-dip, because I'm not sure we ever got out of the first dip," says Radar Logic Chief Executive Michael Feder. "Last year I think buyers moved in because prices were so low, but we've seen such a massive inflow of supply because of foreclosures and the big inventory of foreclosures to come. It's really affecting the comfort that buyers have in the prices they're paying."
Barclays Capital has estimated the number of homes in the hands of lenders, whether Fannie Mae ( FNM - news - people ), Freddie Mac ( FRE - news - people ) or any of the large private banks, is approaching 500,000. More than 200,000 of those homes are in the hands of the government lenders.
"They're the fastest-growing seller of foreclosed homes in the country right now," notes Feder.
Alarmed by the 11 million or so mortgages that are reportedly delinquent, Feder and others have been lobbying government officials to consider alternative plans to rescue housing. Feder favors a plan that would allow Fannie, Freddie and other banks to convert their underwater mortgages to shared-appreciation mortgages that would carry lower monthly payments and give banks and homeowners shared equity stakes in the homes' future appreciation.
One way or another the market must clear, and as it has so often in the past, California appears to be leading the way. Los Angeles, San Diego and San Francisco have all had respectable years thus far. Part of the reason is that state law enables the parties involved to work through foreclosures in as little as 90 days.
"Contrast that with Florida, where getting possession can take several more months," says Humphries.
Prices in Miami are down 6.9% this year, according to Zillow.com
Kentucky down -3.9% to $101600
Indiana up 1.0 % to $ 134,900
Ohio down-3.6 % to $ 130,000
Missouri down-.01 % to $ 149,900
Tennessee down-0.6 % to $ 168,900
West Va. down 0.0 % to $ 149,900
If your worried about foreclosure American Eagle Realty can help you with solid answers about your rights and options before your house is foreclosed on! We are experts in the Short Sale Process and have the experience needed to work with your bank! Contact us we can help.....
American Eagle Realty
www.american-eagle-realty.com
502-969-1801
Saturday, July 10, 2010
Wealthy have become Biggest Defaulters on Mortgages
LOS ALTOS, Calif. — No need for tears, but the well-off are losing their master suites and saying goodbye to their wine cellars.
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Peter DaSilva for The New York Times
The housing bust that began among the working class in remote subdivisions and quickly progressed to the suburban middle class is striking the upper class in privileged enclaves like this one in Silicon Valley.
Whether it is their residence, a second home or a house bought as an investment, the rich have stopped paying the mortgage at a rate that greatly exceeds the rest of the population.
More than one in seven homeowners with loans in excess of a million dollars are seriously delinquent, according to data compiled for The New York Times by the real estate analytics firm CoreLogic.
By contrast, homeowners with less lavish housing are much more likely to keep writing checks to their lender. About one in 12 mortgages below the million-dollar mark is delinquent.
Though it is hard to prove, the CoreLogic data suggest that many of the well-to-do are purposely dumping their financially draining properties, just as they would any sour investment.
“The rich are different: they are more ruthless,” said Sam Khater, CoreLogic’s senior economist.
Five properties here in Los Altos were scheduled for foreclosure auctions in a recent issue of The Los Altos Town Crier, the weekly newspaper where local legal notices are posted. Four have unpaid mortgage debt of more than $1 million, with the highest amount $2.8 million.
Not so long ago, said Chris Redden, the paper’s advertising services director, “it was a surprise if we had one foreclosure a month.”
The sheriff in Cook County, Ill., is increasingly in demand to evict foreclosed owners in the upscale suburbs to the north and west of Chicago — like Wilmette, La Grange and Glencoe. The occupants are always gone by the time a deputy gets there, a spokesman said, but just barely.
In Las Vegas, Ken Lowman, a longtime agent for luxury properties, said four of the 11 sales he brokered in June were distressed properties.
“I’ve never seen the wealthy hit like this before,” Mr. Lowman said. “They made their plans based on the best of all possible scenarios — that their incomes would continue to grow, that real estate would never drop. Not many had a plan B.”
The defaulting owners, he said, often remain as long as they can. “They’re in denial,” he said.
Here in Los Altos, where the median home price of $1.5 million makes it one of the most exclusive towns in the country, several houses scheduled for auction were still occupied this week. The people who answered the door were reluctant to explain their circumstances in any detail.
At one house, where the lender was owed $1.3 million, there was a couch out front wrapped in plastic. A woman said she and her husband had lost their jobs and were moving in with relatives. At another house, the family said they were renters. A third family, whose mortgage is $1.6 million, said they would be moving this weekend.
At a vacant house with a pool, where the lender was seeking $1.27 million, a raft and a water gun lay abandoned on the entryway floor.
Lenders are fearful that many of the 11 million or so homeowners who owe more than their house is worth will walk away from them, especially if the real estate market begins to weaken again. The so-called strategic defaults have become a matter of intense debate in recent months.
Fannie Mae and Freddie Mac, the two quasi-governmental mortgage finance companies that own most of the mortgages in America with a value of less than $500,000, are alternately pleading with distressed homeowners not to be bad citizens and brandishing a stick at them.
In a recent column on Freddie Mac’s Web site, the company’s executive vice president, Don Bisenius, acknowledged that walking away “might well be a good decision for certain borrowers” but argues that those who do it are trashing their communities.
The CoreLogic data suggest that the rich do not seem to have concerns about the civic good uppermost in their mind, especially when it comes to investment and second homes. Nor do they appear to be particularly worried about being sued by their lender or frozen out of future loans by Fannie Mae, possible consequences of default.
The delinquency rate on investment homes where the original mortgage was more than $1 million is now 23 percent. For cheaper investment homes, it is about 10 percent.
With second homes, the delinquency rate for both types of owners was rising in concert until the stock market crashed in September 2008. That sent the percentage of troubled million-dollar loans spiraling up much faster than the smaller loans.
“Those with high net worth have other resources to lean on if they get in trouble,” said Mr. Khater, the analyst. “If they’re going delinquent faster than anyone else, that tells me they are doing so willingly.”
Willingly, but not necessarily publicly. The rapper Chamillionaire is a plain-talking exception. He recently walked away from a $2 million house he bought in Houston in 2006.
“I just decided to let it go, give it back to the bank,” he told the celebrity gossip TV show “TMZ.” “I just didn’t feel like it was a good investment.”
The rich and successful often come naturally to this sort of attitude, said Brent T. White, a law professor at the University of Arizona who has studied strategic defaults.
“They may be less susceptible to the shame and fear-mongering used by the government and the mortgage banking industry to keep underwater homeowners from acting in their financial best interest,” Mr. White said.
The CoreLogic data measures serious delinquencies, which means the borrower has missed at least three payments in a row. At that point, lenders traditionally file a notice of default and the house enters the official foreclosure process.
In the current environment, however, notices of default are down for all types of loans as lenders work with owners in various modification programs. Even so, owners in some of the more expensive neighborhoods in and around San Francisco are beginning to head for the exit, according to data compiled by MDA DataQuick.
In Los Altos, Los Altos Hills and the most expensive neighborhood in adjoining Mountain View, defaults in the first five months of this year edged up to 16, from 15 in the same period in 2009 and four in 2008.
The East Bay suburb of Orinda had eight notices of default for million-dollar properties, up from five in the same period last year. On Nob Hill in San Francisco, there were four, up from one. The Marina neighborhood had four, up from two.
The vast majority of owners in these upscale communities are still paying the mortgage, of course. But they appear to be cutting back in other ways. The once-thriving Los Altos downtown is pocked with more than a dozen empty storefronts in a six-block stretch.
But this is still Silicon Valley, where failure can always be considered a prelude to success.
In the middle of a workday, one troubled homeowner here leaned over his laptop at the kitchen table, trying to maneuver his way out from under his debt and figure out the next big thing.
His five-bedroom house, drained of hundreds of thousands of dollars of equity over the last 13 years, is scheduled for auction July 20. Nine months ago, after his latest business (he has had several) failed in what he called “the global meltdown,” the man, a technology entrepreneur, said he quit making his $9,000 monthly payments.
“I’m going to be downsizing,” he said.
The man spoke on the condition of anonymity because, he said, he did not want his current problems to interfere with his coming reinvention. “I’m a businessman,” he explained. “I have to be upbeat.”
Carol Pogash contributed reporting.
BIG LOAN SMALL LOAN IT DOES NOT MATTER.........WE CAN HELP.........
If your worried about foreclosure American Eagle Realty can help you with solid answers about your rights and options before your house is foreclosed on! We are experts in the Short Sale Process and have the experience needed to work with your bank! Contact us we can help.....
American Eagle Realty
www.american-eagle-realty.com
502-969-1801
Enlarge This Image
Peter DaSilva for The New York Times
The housing bust that began among the working class in remote subdivisions and quickly progressed to the suburban middle class is striking the upper class in privileged enclaves like this one in Silicon Valley.
Whether it is their residence, a second home or a house bought as an investment, the rich have stopped paying the mortgage at a rate that greatly exceeds the rest of the population.
More than one in seven homeowners with loans in excess of a million dollars are seriously delinquent, according to data compiled for The New York Times by the real estate analytics firm CoreLogic.
By contrast, homeowners with less lavish housing are much more likely to keep writing checks to their lender. About one in 12 mortgages below the million-dollar mark is delinquent.
Though it is hard to prove, the CoreLogic data suggest that many of the well-to-do are purposely dumping their financially draining properties, just as they would any sour investment.
“The rich are different: they are more ruthless,” said Sam Khater, CoreLogic’s senior economist.
Five properties here in Los Altos were scheduled for foreclosure auctions in a recent issue of The Los Altos Town Crier, the weekly newspaper where local legal notices are posted. Four have unpaid mortgage debt of more than $1 million, with the highest amount $2.8 million.
Not so long ago, said Chris Redden, the paper’s advertising services director, “it was a surprise if we had one foreclosure a month.”
The sheriff in Cook County, Ill., is increasingly in demand to evict foreclosed owners in the upscale suburbs to the north and west of Chicago — like Wilmette, La Grange and Glencoe. The occupants are always gone by the time a deputy gets there, a spokesman said, but just barely.
In Las Vegas, Ken Lowman, a longtime agent for luxury properties, said four of the 11 sales he brokered in June were distressed properties.
“I’ve never seen the wealthy hit like this before,” Mr. Lowman said. “They made their plans based on the best of all possible scenarios — that their incomes would continue to grow, that real estate would never drop. Not many had a plan B.”
The defaulting owners, he said, often remain as long as they can. “They’re in denial,” he said.
Here in Los Altos, where the median home price of $1.5 million makes it one of the most exclusive towns in the country, several houses scheduled for auction were still occupied this week. The people who answered the door were reluctant to explain their circumstances in any detail.
At one house, where the lender was owed $1.3 million, there was a couch out front wrapped in plastic. A woman said she and her husband had lost their jobs and were moving in with relatives. At another house, the family said they were renters. A third family, whose mortgage is $1.6 million, said they would be moving this weekend.
At a vacant house with a pool, where the lender was seeking $1.27 million, a raft and a water gun lay abandoned on the entryway floor.
Lenders are fearful that many of the 11 million or so homeowners who owe more than their house is worth will walk away from them, especially if the real estate market begins to weaken again. The so-called strategic defaults have become a matter of intense debate in recent months.
Fannie Mae and Freddie Mac, the two quasi-governmental mortgage finance companies that own most of the mortgages in America with a value of less than $500,000, are alternately pleading with distressed homeowners not to be bad citizens and brandishing a stick at them.
In a recent column on Freddie Mac’s Web site, the company’s executive vice president, Don Bisenius, acknowledged that walking away “might well be a good decision for certain borrowers” but argues that those who do it are trashing their communities.
The CoreLogic data suggest that the rich do not seem to have concerns about the civic good uppermost in their mind, especially when it comes to investment and second homes. Nor do they appear to be particularly worried about being sued by their lender or frozen out of future loans by Fannie Mae, possible consequences of default.
The delinquency rate on investment homes where the original mortgage was more than $1 million is now 23 percent. For cheaper investment homes, it is about 10 percent.
With second homes, the delinquency rate for both types of owners was rising in concert until the stock market crashed in September 2008. That sent the percentage of troubled million-dollar loans spiraling up much faster than the smaller loans.
“Those with high net worth have other resources to lean on if they get in trouble,” said Mr. Khater, the analyst. “If they’re going delinquent faster than anyone else, that tells me they are doing so willingly.”
Willingly, but not necessarily publicly. The rapper Chamillionaire is a plain-talking exception. He recently walked away from a $2 million house he bought in Houston in 2006.
“I just decided to let it go, give it back to the bank,” he told the celebrity gossip TV show “TMZ.” “I just didn’t feel like it was a good investment.”
The rich and successful often come naturally to this sort of attitude, said Brent T. White, a law professor at the University of Arizona who has studied strategic defaults.
“They may be less susceptible to the shame and fear-mongering used by the government and the mortgage banking industry to keep underwater homeowners from acting in their financial best interest,” Mr. White said.
The CoreLogic data measures serious delinquencies, which means the borrower has missed at least three payments in a row. At that point, lenders traditionally file a notice of default and the house enters the official foreclosure process.
In the current environment, however, notices of default are down for all types of loans as lenders work with owners in various modification programs. Even so, owners in some of the more expensive neighborhoods in and around San Francisco are beginning to head for the exit, according to data compiled by MDA DataQuick.
In Los Altos, Los Altos Hills and the most expensive neighborhood in adjoining Mountain View, defaults in the first five months of this year edged up to 16, from 15 in the same period in 2009 and four in 2008.
The East Bay suburb of Orinda had eight notices of default for million-dollar properties, up from five in the same period last year. On Nob Hill in San Francisco, there were four, up from one. The Marina neighborhood had four, up from two.
The vast majority of owners in these upscale communities are still paying the mortgage, of course. But they appear to be cutting back in other ways. The once-thriving Los Altos downtown is pocked with more than a dozen empty storefronts in a six-block stretch.
But this is still Silicon Valley, where failure can always be considered a prelude to success.
In the middle of a workday, one troubled homeowner here leaned over his laptop at the kitchen table, trying to maneuver his way out from under his debt and figure out the next big thing.
His five-bedroom house, drained of hundreds of thousands of dollars of equity over the last 13 years, is scheduled for auction July 20. Nine months ago, after his latest business (he has had several) failed in what he called “the global meltdown,” the man, a technology entrepreneur, said he quit making his $9,000 monthly payments.
“I’m going to be downsizing,” he said.
The man spoke on the condition of anonymity because, he said, he did not want his current problems to interfere with his coming reinvention. “I’m a businessman,” he explained. “I have to be upbeat.”
Carol Pogash contributed reporting.
BIG LOAN SMALL LOAN IT DOES NOT MATTER.........WE CAN HELP.........
If your worried about foreclosure American Eagle Realty can help you with solid answers about your rights and options before your house is foreclosed on! We are experts in the Short Sale Process and have the experience needed to work with your bank! Contact us we can help.....
American Eagle Realty
www.american-eagle-realty.com
502-969-1801
Thursday, July 8, 2010
The Real Estate Nightmare
Facts About the Real Estate Nightmare
Business Insider boiled it down to a “simple” list… why the US real estate market is in such trouble. I don’t think any of the items on the list are a great shock to anyone, but together they spell big trouble. It points to the fact that we shouldn’t expect the housing market to recover anytime soon. That’s bad news for sellers, but good news for buyers.
1. Record low new home sales in May (32.7% drop).
2. Home prices are falling (median price down 9.6% over 2009).
3. Tax credit sales were revised sharply down (previous estimates were too
optimistic!).
4. May home sales show an irrefutable double dip.
5. May housing starts fell 10% over 2009.
6. Internet searches on real estate down 20% (see previous story).
7. Freddie & Fannie are a fiscal disaster.
8. The tax credit that was supposed to stabilize the market has expired.
9. Foreclosures are rising – up 18.6% in the first quarter of 2010.
10. Second wave of adjustable ARMs reset next year.
11. Home lending is getting harder due to tighter standards.
12. Mortgage delinquencies at record levels.
13. The overall economy reset will sink the housing bubble.
14. The oil spill will hurt the housing market.
Business Insider boiled it down to a “simple” list… why the US real estate market is in such trouble. I don’t think any of the items on the list are a great shock to anyone, but together they spell big trouble. It points to the fact that we shouldn’t expect the housing market to recover anytime soon. That’s bad news for sellers, but good news for buyers.
1. Record low new home sales in May (32.7% drop).
2. Home prices are falling (median price down 9.6% over 2009).
3. Tax credit sales were revised sharply down (previous estimates were too
optimistic!).
4. May home sales show an irrefutable double dip.
5. May housing starts fell 10% over 2009.
6. Internet searches on real estate down 20% (see previous story).
7. Freddie & Fannie are a fiscal disaster.
8. The tax credit that was supposed to stabilize the market has expired.
9. Foreclosures are rising – up 18.6% in the first quarter of 2010.
10. Second wave of adjustable ARMs reset next year.
11. Home lending is getting harder due to tighter standards.
12. Mortgage delinquencies at record levels.
13. The overall economy reset will sink the housing bubble.
14. The oil spill will hurt the housing market.
Wednesday, July 7, 2010
33% of Home Sales are a Foreclosure!
Nearly 1 in 3 first-quarter home sales a foreclosure: report
By Julie Haviv | 30 June 2010 @ 10:37 am EDT
Nearly one out of every three U.S. home sales in the first quarter was a foreclosure property as steep price discounts boosted demand for distressed real estate, RealtyTrac said in a new report on Wednesday.
Foreclosure homes accounted for 31 percent of all residential sales in the first quarter of 2010, with the average sales price of properties that sold while in some stage of foreclosure nearly 27 percent below homes that were not in the process, Irvine, California-based RealtyTrac said.
"In a normal market, only 1 to 2 percent of home sales are foreclosures, so this is certainly a significant level," Rick Sharga, senior vice president at RealtyTrac, said in an interview.
Total U.S. foreclosure sales in 2009 were up more than 1,100 percent from 2006 and more than 2,500 percent from 2005. Foreclosure sales accounted for 29 percent of all sales in 2009, up from 23 percent in 2008 and a mere 6 percent in 2007, the real estate data company said.
Foreclosure activity in the first quarter, however, ebbed from the previous quarter as well as year-over-year.
A total of 232,959 U.S. properties in some stage of foreclosure -- including mortgage default notices, scheduled for auction or bank-owned (REO) -- were sold to third parties in the first quarter, a decrease of 14 percent from the previous quarter and down 33 percent from the peak during the first quarter of 2009, when sales of foreclosure homes accounted for 37 percent of all residential sales.
"The drop from the previous quarter can probably be attribute to seasonality, and while the year-over-year drop is significant, it should be noted that it was down from the peak," Sharga said.
"A combination of an enormous inventory of distressed properties and an unprecedented interest by homebuyers to buy these properties boosted sales," he said.
The average sales prices on properties in some stage of foreclosure decreased 23 percent from 2006-09, while the average discounts on foreclosure purchases increased from 21 percent in 2006 to 27 percent in the first quarter of 2010.
The discounts on REOs are larger than those on pre-foreclosures, although discounts on pre-foreclosures appear to be trending higher as short sales become more common, the company said.
"First time homebuyers and investors continue to buy foreclosure properties in large numbers, and at substantial discounts," James Saccacio, Chief Executive Officer of RealtyTrac, said in a statement.
"As lenders have begun repossessing homes at record levels over the first half of 2010, it will be interesting to watch how they will manage the inventory levels of distressed properties on the market in order to prevent more dramatic price deterioration," he said.
Meanwhile, the Sun Belt continued to lead foreclosures nationally, with Nevada, California and Arizona posting the highest percentage of foreclosure sales in the first quarter.
Foreclosure sales accounted for 64 percent of all sales in Nevada in the first quarter -- the highest percentage of any state. The state's percentage was down from 65 percent of all sales in the previous quarter and 75 percent of overall sales in the first quarter of 2009.
California posted the second highest percentage for U.S. states, with foreclosure sales accounting for 51 percent of all sales there in the first quarter -- up from 50 percent in the previous quarter, but down from 70 percent of all sales in the first quarter of 2009.
Other states where foreclosure sales accounted for at least one-third of total sales were Massachusetts, Rhode Island, Florida, Michigan, Georgia, Illinois, Idaho and Oregon.
Foreclosures are by far one of the biggest threats to the U.S. housing market. Improvement in the housing market bodes well for the national economy, as it points to better demand in the sector where the first signs of the latest recession took root.
By Julie Haviv | 30 June 2010 @ 10:37 am EDT
Nearly one out of every three U.S. home sales in the first quarter was a foreclosure property as steep price discounts boosted demand for distressed real estate, RealtyTrac said in a new report on Wednesday.
Foreclosure homes accounted for 31 percent of all residential sales in the first quarter of 2010, with the average sales price of properties that sold while in some stage of foreclosure nearly 27 percent below homes that were not in the process, Irvine, California-based RealtyTrac said.
"In a normal market, only 1 to 2 percent of home sales are foreclosures, so this is certainly a significant level," Rick Sharga, senior vice president at RealtyTrac, said in an interview.
Total U.S. foreclosure sales in 2009 were up more than 1,100 percent from 2006 and more than 2,500 percent from 2005. Foreclosure sales accounted for 29 percent of all sales in 2009, up from 23 percent in 2008 and a mere 6 percent in 2007, the real estate data company said.
Foreclosure activity in the first quarter, however, ebbed from the previous quarter as well as year-over-year.
A total of 232,959 U.S. properties in some stage of foreclosure -- including mortgage default notices, scheduled for auction or bank-owned (REO) -- were sold to third parties in the first quarter, a decrease of 14 percent from the previous quarter and down 33 percent from the peak during the first quarter of 2009, when sales of foreclosure homes accounted for 37 percent of all residential sales.
"The drop from the previous quarter can probably be attribute to seasonality, and while the year-over-year drop is significant, it should be noted that it was down from the peak," Sharga said.
"A combination of an enormous inventory of distressed properties and an unprecedented interest by homebuyers to buy these properties boosted sales," he said.
The average sales prices on properties in some stage of foreclosure decreased 23 percent from 2006-09, while the average discounts on foreclosure purchases increased from 21 percent in 2006 to 27 percent in the first quarter of 2010.
The discounts on REOs are larger than those on pre-foreclosures, although discounts on pre-foreclosures appear to be trending higher as short sales become more common, the company said.
"First time homebuyers and investors continue to buy foreclosure properties in large numbers, and at substantial discounts," James Saccacio, Chief Executive Officer of RealtyTrac, said in a statement.
"As lenders have begun repossessing homes at record levels over the first half of 2010, it will be interesting to watch how they will manage the inventory levels of distressed properties on the market in order to prevent more dramatic price deterioration," he said.
Meanwhile, the Sun Belt continued to lead foreclosures nationally, with Nevada, California and Arizona posting the highest percentage of foreclosure sales in the first quarter.
Foreclosure sales accounted for 64 percent of all sales in Nevada in the first quarter -- the highest percentage of any state. The state's percentage was down from 65 percent of all sales in the previous quarter and 75 percent of overall sales in the first quarter of 2009.
California posted the second highest percentage for U.S. states, with foreclosure sales accounting for 51 percent of all sales there in the first quarter -- up from 50 percent in the previous quarter, but down from 70 percent of all sales in the first quarter of 2009.
Other states where foreclosure sales accounted for at least one-third of total sales were Massachusetts, Rhode Island, Florida, Michigan, Georgia, Illinois, Idaho and Oregon.
Foreclosures are by far one of the biggest threats to the U.S. housing market. Improvement in the housing market bodes well for the national economy, as it points to better demand in the sector where the first signs of the latest recession took root.
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