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Foreclosure Trends Have Everyone Thinking



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By : Karim El Sheikh    99 or more times read
Industry experts predict that foreclosures will continue throughout the end of this year and into 2012. There is quite a bit of foreclosure inventory available throughout the nation. Unemployment is still high and the economy has not recovered. So until the current inventory gets sold and the large numbers of short sales and preforeclosures are either sold or borrowers find a way to keep their homes, foreclosures will continue to keep housing prices from rebounding.

According to recent statistics, the current foreclosure inventory of 1.9 million homes would take three years to get rid of at the current rate of sales. Foreclosure homes accounted for 28 percent of all sales during the second quarter, which was just slightly higher than 27 percent during the first quarter of 2011.

The average sales price for a foreclosed home during the first quarter of 2011 was $168,321, which was 1.89 percent less than the fourth quarter of 2010. Sales volume was off, too. According to the NAR’s report released on May 27, 2011, for April 2011, pending home sales fell in April. The pending home sales index dropped 81.9 percent in April from 92.6 percent in March. Analysts blamed unusual weather conditions, economic softness, high oil prices and a sudden rise in unemployment claims for the decline in pending home sales. Lawrence Yun, NAR’s chief economist also blames tight lending guidelines for the slow housing market recovery.

A total of 158,434 foreclosed homes were purchased during the first quarter of 2011. Preforeclosures accounted for 9 percent of all sales during the first quarter 2011. Nevada still leads the country with the highest number of foreclosure sales at 53 percent of all residential sales. The average foreclosed home in Nevada sold 18 percent below the price of a non-foreclosure home. California and Arizona are next in line of states with high numbers of foreclosure sales. Forty-five percent of all residential property sales in California and Arizona were foreclosures during the first quarter of 2011.

The next top 10 states with high numbers of foreclosure sales were Idaho with 33 percent of all residential sales being foreclosures, Florida, Michigan and Oregon with 32 percent, Virginia and Colorado with 30 percent, and Illinois with 29 percent. Ohio foreclosed homes sold 41 percent less than the price of a non-foreclosed home. Next was Illinois where homes sold under 41 percent of a non-foreclosed home, Kentucky with about 39 percent difference and Maryland, Tennessee, Wisconsin, Delaware, Pennsylvania, Oklahoma and Louisiana had average differences of more than 35 percent. If you are looking for foreclosures bargains, you may want to purchase a foreclosed home in these states.

Investors and first-time homebuyers have scooped up a lot of the inventory with such affordable prices. Cash buyers have an edge with tight credit markets right now. They have the freedom to purchase some terrific bargain priced homes in all areas and price ranges at auctions and from banks’ REO inventories.

Investors are renting out their foreclosures because rental properties are in high demand since many families have been displaced as a result of losing their homes to foreclosures. For those of you who are in a position to buy, now is still a great time to do so. Interest rates are low, and with a three-year supply of inventory nationwide, it appears that conditions will remain a buyer’s market for quite some time.
Foreclosure.com is your source for finding great home deals. Search foreclosure listings, short sales, preforeclosures, and more.

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