Foreclosure prices continue to decline
As more and more foreclosure properties are flooding the market, home prices continue to spiral down, indicating that the bottom has not yet been reached.
The Real Estate market is continuously experiencing a fast decline in home prices as millions more of foreclosures are expected to fill the market in the next few years. This will definitely cause home prices to further ease down and downplay the recovery that some cities are starting to experience. The controversy involving foreclosure paperwork could also cause foreclosures to stay at the same low levels of prices.
Recent months have taken a toll on the housing market as fewer people have bought Real Estate,
and buyers are turning more to foreclosure purchases and other distressed properties. The latest index for home prices in 20 major US metro areas shows that the average price fell 0.2 percent in August, with 15 cities posting similar declines.
According to LPS Applied Analytics, an inventory of homes also reveals that the foreclosure problem is far from over. About 2 million loans are currently on the verge of foreclosure with another 2.4 million borrowers exhibiting mortgage default behavior in their payments. It is expected that prices will fall by another 10 percent over the next year and not much improvement could be seen at least for the same period.
Homeowners having difficulty with their mortgages reside in cities where the housing bust had largely fallen. In Las Vegas, the ratio remains at one in 15 homeowners receiving default notice while in Florida metro area, the ratio is one in 20. In Phoenix, the figure is one in 23.
All these could indicate that the market is still reeling from the housing crisis. However, investors who buy properties to either lease or sell could be doing the country a favor by helping uplift the economy. In fact, those who pay in cash could be stabilizing the housing market with many retirees opting to invest in foreclosure houses.
Chicago, Washington and New York remain on the positive side with fewer foreclosures than other cities and showing more consistent price increases than any other areas. San Francisco’s home prices have already increased by 21 percent and San Diego prices have clearly surged nearly 14 percent and steadily over the last 15 months.
However, it still remains uncertain how the allegations of shadowy paperwork against lenders and banks will affect the market. Some buyers have already expressed their concerns of how the situation would affect their purchases, relaying fears that their purchase could be found invalid or ineffective due to the paper mess.
