House prices are still decreasing in the U.S. And foreclosure rates are increasing. This should make house buyers happy. Sellers, however, would be advised to give it more time.
Huge drop shown on report from FHFA
The Federal Housing Finance Agency reports this week that its home-price index fell in the current quarter faster than at any time since 2008. Prices have fallen 2.5 percent in the last quarter, which is a decline of 5.5 percent from last year. Only homes covered by Fannie Mae or Freddie Macwere in the report. It excludes cash only sales.
Foreclosures are the reason
FHFA acting director Edward DeMarco said, “In many local real estate markets, particularly those hit hard by this cycle, foreclosures and other distressed properties are still a key factor in recorded and anticipated future sales and may be delaying price stability or recovery.” The prices of homes in foreclosure are dropping, according to RealtyTrac. There was a 1.89 percent drop from the last quarter to an average sale price of $168,321. That is a 1.46 percent drop in price from this time last year. Foreclosures end up lowering home values in the whole neighborhood. The rest of the index ends up impacted by the foreclosures.
Foreclosure 3rd parties
”While foreclosure sales continue to account for an unusually high percentage of all residential home sales, sales volume is well off the peak we saw in the first quarter of 2009, when nearly 350,000 foreclosure properties were sold to third parties,” said CEO of RealtyTrac, James Saccacio. There was a 16 percent decline from the last quarter and 36 percent go down from a year ago in the number of homes sold to 3rd parties which was at 158,434 in the first quarter.
States have different foreclosure rates
Foreclosure rates depend on the state. Some have more while others have less. Both Ohio and Illinois had the same. It was 41 percent for both. California and Arizona had foreclosure rates of 45 percent. About 53 percent of the market was foreclosures in Nevada.
Be careful of scams
There have been more foreclosure scams recently. Some companies promise to protect from foreclosure for an upfront fee. The homeowners end up with nothing. The Federal Trade Commission no longer allows upfront fees for negotiations on mortgage reduction plans. This change was made in February.
Information from
Wall Street Journal
blogs.wsj.com/marketbeat/2011/05/25/home-prices-fall-at-fastest-pace-since-late-2008/?mod=google_news_blog
DS News
dsnews.com/articles/home-prices-post-biggest-drop-in-two-years-as-foreclosures-depress-market-2011-05-26
DS News
dsnews.com/articles/home-prices-post-biggest-drop-in-two-years-as-foreclosures-depress-market-2011-05-26
Daily Finance
dailyfinance.com/2011/05/27/foreclosure-prices-fall-again-how-your-state-stacks-up/
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