There are more choices of New Orleans bank owned homes for sale as more homes in the city were repossessed by lenders in May. The expected surge in defaults and foreclosures resulting from the Gulf Coast oil spill would increase even more the foreclosure inventory and could push down prices further.
Of the 294 foreclosure cases filed in Orleans Parish, whose boundaries are the same with those of New Orleans, 152 units or 52 percent of total filings were bank owned that are eventually released as REO properties for sale. Among Louisiana parishes, Orleans posted the biggest total of REO units. Saint Tammany posted the highest foreclosure rate.
Although the total number of distressed and bank owned homes in Louisiana in May marked a drop of 6.3 percent over the month, the total marked a staggering increase of 84.2 percent from May 2009. A total of 1,733 foreclosure cases were filed, including 524 REO units and 973 units posted for foreclosure auctions.
Of the 524 real estate owned units statewide, 29 percent or 152 units were New Orleans bank owned homes for sale. Based on studies by Costar, the plunge in property values resulting from concerns about the effects of the oil spill could exacerbate defaults and foreclosure filings in New Orleans.
Costar analysts said that the values of properties located along the Gulf Coast from the bayous of Louisiana to the beaches of Florida could drop by 10 percent for three years or more. They based their estimates on the effects of previous oil spills and on sales data for properties within 60 miles of the Gulf Coast and stretching 965 kilometers from Louisiana to Florida.
The property value projections made by Costar affirms value estimates made by brokers in New Orleans. The prices of New Orleans bank owned homes for sale and non-foreclosures could drop further by 5 to 15 percent in the coming months.