Fewer People to Buy Bank Owned Homes Means a Drop in Price- By: John Cutts
Not a lot of people willing to buy bank owned homes and other residences came to California in November, leading to a drop in housing unit sales. Sales of homes in the state declined by 2.3% during the month compared with November 2009. The average price of houses declined from last year's $261,000 to $255,000 in November of this year.
Aside from fewer buyers of foreclosed homes in Manhattan Beach and other types of dwellings in various California markets, industry analysts also cited the slowdown in high-end housing sales as part of the reason for the price decline. According to them, among the few who ventured to invest in residential properties in November, most favored cheaper dwellings which caused a decrease in median prices.
Housing sales, including non-foreclosure and home foreclosures in California, totaled 31,403 for November 2010. This represents a 12.4% decline compared with the November 2009 total of 35,860. When compared with October 2010, November's median home price dropped by 0.4% from $256,000. The most noticeable trend though, analysts revealed, was the absence of buyers willing to purchase higher-priced dwellings which left a big supply of expensive houses in the market.
Realtors reported that November was the month for people who preferred to buy bank owned homes and other low-priced residences. They speculate that most buyers who can afford pricier residences are waiting for further price declines or until the market regains some semblance of stability, something that they can easily afford to do if they had the money to buy higher-end properties in the first place.
Almost 19% of residences sold in November came from listings of bank foreclosed homes and other dwellings that are cheaper than $500,000. In the previous month, 19.7% of houses sold were in this price range, while in November of last year, 19.3% of residential properties sold were priced at less than half a million dollars.
Housing data for California showed that in the past decade, around 26% of houses sold every November are over the price of $500,000. The fact that 37.8% of house purchases during the month were made by people who buy bank owned homes is also considered a factor in the decline of prices. Analysts stated that foreclosures are offered cheaply and usually impact average home prices.
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John Cutts has been educated in the finer points of the foreclosure market over 5 years.