Foreclosed Homes Starting To Move
The housing market is still in a slump, but a recent report by BusinessWeek indicates that the sale of foreclosed homes is beginning to pick up and currently makes up the largest part of existing-home sales in many states.
Before there was the wave of foreclosures across the country and a glut of foreclosed properties on the market, most people would have never considered buying a foreclosed property.
The average home buyer would generally not have known how or where to find a foreclosed property to buy, and even if they did, many people would have been uncomfortable with the idea of benefiting from fact that another family had been evicted or unsure about the condition of foreclosed houses.
After the flood of foreclosed properties hit the market, the issue of finding and buying a foreclosure property vanished because they are now so common; however, if the recent increase in the sales of foreclosed homes is any indication, prospective home buyers are overcoming their discomfort and uncertainty.
In California, there has been a large increase in the sale of foreclosed properties:
- During the second quarter of 2008, seven out of 10 existing-home sales in San Joaquin and Merced counties were of houses that had been foreclosed on in the previous 12 months.
- In Sacramento County, six out of 10 existing home sales were recently in foreclosure, according to DataQuick, a real estate information company in California.
Although economists say that it is good news that there is activity in the housing market, the prices of homes are continuing to sink.
Foreclosures create an endless loop of misfortune in the housing market by bringing down the market value of entire communities. Some states that have seen a stagnant housing market while foreclosure rates skyrocketed are finally beginning to see some of those foreclosed properties get new owners.
The good news for prospective home buyers, but not necessarily the housing market or anyone else, is that the increase in sales of foreclosed properties is not yet pushing up the price of houses.
However, these sales are working to take some of the tremendous amount of vacant homes off the market and if the trend continues, many foreclosure-ravaged areas could start to shape up again and help home prices eventually recover.