The price of homes is still falling in the United States as foreclosure rates grow. This is awesome news for house buyers looking for a deal. However, should you be looking to sell, it may be advantageous to wait just a little longer.
Huge decline shown on report from FHFA
The home-price index fell quicker than it has since 2008 in the first quarter according to the Federal Housing Finance Agency. In the last quarter, prices went down 2.5 percent, which is a 5.5 percent decline from last year was. Only homes covered by Fannie Mae or Freddie Macwere in the report. Cash only sales are also not in the list.
Foreclosures are the reason
According to Edward DeMarco, FHFA director, “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. During the first quarter, the average sale price was $168,321 which dropped 1.46 percent from a year ago and 1.89 percent from the quarter before. The rest of the homes are worth less since foreclosures lower the value of homes in the neighborhood.
Fewer foreclosures going to third 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,” reported James Saccacio, the CEO of RealtyTrac. There was a 16 percent drop from the last quarter and 36 percent drop from a year ago in the number of homes sold to third parties which was at 158,434 in the first quarter.
Foreclosures rates vary by state
The percentage of houses on the market from foreclosure is different in every state. It was at 41 percent in both Ohio and Illinois. California and Arizona had foreclosure rates of 45 percent. It was really bad in Nevada. About 53 percent of the industry accounted for foreclosures.
Possible foreclosure frauds to look at out for
This trend has brought out higher numbers of foreclosure rescue scams. These scams involve upfront fees for promises of foreclosure prevention that never occur, leaving the distressed homeowners high and dry. Mortgage reduction plan negotiations can’t have upfront fees anymore with a requirement made in Feb. with the Federal Trade Commission.
Citations
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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