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Residential Foreclosures Pulled Home Prices Down in Indianapolis

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By : John Cutts    99 or more times read
Residential foreclosures continue to account for a huge percentage of housing unit sales in Indianapolis, Indiana, last year. Home sales figures from the U.S. Federal Housing Finance Agency (FHFA) saw a year-over-year increase in prices nationwide for the second time in five years. However, Indianapolis posted a decline in 2010.

The decline in housing sales prices was largely attributed by housing market analysts to Indianapolis foreclosures. The metro area's average selling home price dropped to $197,800 in 2010 compared with $225,900 in 2009, representing a 12.4% decline. Indianapolis had the third lowest average selling price for residences last year out of the 32 biggest metropolitan areas highlighted in the FHFA report. However, industry analysts stated that prices have always been low in the area anyway, so this should not be interpreted as a further decline in the housing market of the metro.

They further added that the drop in the average selling rate was due to more homes in the low-priced segment getting sold during the year, including Indiana foreclosure homes, as opposed to pricier dwellings, which could have pulled the average prices up. The good news is seen nationwide though, as prices in the U.S. as a whole posted a year-over-year increase for the second time since 2005, when the housing industry crisis started.

The average sales price for new homes, residential foreclosures and other previously owned dwellings was up nationwide by 3.5% in 2010 compared with 2009. Out of the 32 metros studied by the FHFA, 19 posted a yearly price increase, while one remained the same as the previous period. Among those that posted increases, 11 had a double digit year-over-year price increase.

The biggest increase in the average prices of newly-built homes and houses in foreclosure was recorded in Detroit, which posted a gain of 25.9%, followed by Philadelphia, with 19.4%, and Boston, with 19.1%. Houses in San Francisco Bay Area remained the most expensive last year, with the average selling price pegged at $614,200.

Analysts stated that areas posting higher average selling prices do not necessarily represent improving markets, the same way that metros with price declines are representatives of a slide back to crisis levels. They stated that price movements are heavily influenced by the amount of low-priced residential foreclosures and high-priced luxury homes sold during the period.
John Cutts has been educated in the finer points of the foreclosure market over 5 years.

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