More Foreclosures Leading to Rise in Home Sales

October 1st, 2009

At least 31% of the sales took place due to foreclosures in August. In some western states, however, this figure just superseded the usual trends. The sales of homes falling in the category of distressed property in the regions of California and Arizona accounted for more than 50% of the sales in August. There were 4 or 5 distressed properties in Nevada.

In Arizona, there has been a fall in the range of bank-owned homes as the smart bargainers acquired more properties. Approximately 15% to 18% of houses in Phoenix property market have become properties owned by the banks according to Scott. San Francisco usually didn’t have a usual trend of foreclosures as Oakland including the other Bay area belts. However, the pace of home sales has gone down in San Francisco. Compared to the records of August 2008, this year there was a fall in the sales figures by 2%. On the other hand, the average price fell by 13% making it $430,000.

Despite all this, the category of single-family homes that are not sold to any one, has maintained a low profile to at least a month supply of 2.6. This is the lowest parameter within 2 years as per the observations of the San Francisco Association of Realtors. At the Century 21 Hartford in San Francisco sales didn’t drop as there was a rise of 10% during August according to the comments of Romeo Aurelio, the sales manager. The period between October and November was considered to be the worst and according to Aurelio “so things have definitely rebounded since then.” The conditions of September were similar to August. Most of the sales took place for homes priced below $400,000 as financing has always been a problem regarding those properties which are more expensive.

Aurelio also observed that, “People who should be qualifying just aren’t able to get loans right now. “And it’s really making it tough to sell these properties between $800,000 and $1.2 million.” Numerous buyers searching for a better foreclosed property with better price for bargaining are finding it tough to compete with those investors who are interested in paying more cash in order to out do the fresh buyers. The real estate investors such as Ramon Navarro in the Denver property markets are also buying homes, which are not under the category of distressed property. The sales in Denver almost jumped to 20% compared to last year August records and the average price rose to 4.6% making it at least $209,000.

Navarro, a health insurance consultant feels that, “There’s still some investments to be made out here. How much longer it’s going to continue, I don’t know.” He bought a house for $335,000 while it was priced at $350,000.