Inventory is shrinking and traffic for homebuyers seems to be increasing, but according to the Campbell/Inside Mortgage Finance HousingPulse Tracking Survey,
home prices were down in March. One reason for this, according to the
survey, which includes about 2,500 real estate agents, is the high
number of distressed properties on the market.
Home prices for non-distressed properties in March dropped 5.7 percent from a year ago in March 2011. Prices for damaged REO properties also saw a 5.7 percent decline in prices, while move-in ready REO
prices fell 2.5 percent during the same period. Short sales declined
significantly, with prices falling 14.3 percent during the one-year
period.
According to a recent RealtyTrac
report, the average price of a home sold via short sale in January 2012
was $174,120, down 10 percent from January 2011. This, RealtyTrac
stated, shows that lenders are more willing to approve more aggressively
priced short sales.
Driven by an increase in short sales, the total share of distressed
properties in the housing market in March was 47.7 percent when using a
three-month moving average, according to the HousingPulse Distressed
Property Index (DPI). This marks the 25th consecutive month the index has hovered over the 40 percent mark.
With nearly half of the market being
distressed, we’re a long way from a return to a normal market,” said
Thomas Popik, research director at Campbell Surveys.
“Agents responding to our survey say that homeowners with
well-maintained properties in good locations are very reluctant to list
at today’s prices. That’s why inventory is low-and also why forced REO and short sales are such a big proportion of the remaining market.”
Over the past six months, the proportion of short sale transactions
in the housing market increased from 17.8 percent to 19.9 percent.
The survey also found that traffic indexes for first-time
homebuyers, current homeowners, and investors all showed substantial
increases in March compared to the year before, with
indexes showing
current homeowners and investors were higher than those recorded when
the federal homebuyer’s tax credit was offered in 2009 and 2010.
Meanwhile, HousingPulse found that real estate agents reported
housing inventories well below levels seen a year ago, especially for
attractive properties in desirable locations.
What Agents Said in the Survey
“[Purchase] Activity has increased while prices continue to fall.
There is a significant increase in the number of short sales and
foreclosures on the market in our area.” – Agent in Delaware.
“Sales are up 29 percent year-to-date through the end [of] March.
Pendings are up 55 percent. Prices just are beginning to rise.” – Agent
from California.
“Volume is increasing, but prices are not. Only very nice homes are selling faster.” – Agent in Pennsylvania.
1 comment:
Distressed properties are a type of real estate that is being offered for sale because of an impending foreclosure or repossession. There are many different kinds of distressed properties, generally depending on what stage of the foreclosure process the property is under. There are distressed properties for sale from homeowners who have recently defaulted on their mortgage and are looking to sell before they get any further behind, and there are distressed properties that are scheduled for public auction by lenders or local courts as the last stage of the months-long foreclosure process. But what all distressed properties have in common is a low price tag. Distressed homes can sell for anywhere from 30%, to 45%, even up to 60% off what they are actually worth, and this makes them an incredible opportunity for all home buyers and real estate investors.
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