Sales of Foreclosed Homes are Picking Up

The real estate market in the US is in doldrums. It all started when people lost jobs and were unable to make mortgage payments. Subsequently banks have taken over the homes and foreclosures are a common feature in many US regions. Sales of foreclosed properties are also picking up and first-time investors are snapping up these homes. Homeowners are also rushing to buy these properties as the government announces tax credit.

In the west, the median price of homes has plummeted by 28 per cent — $202,300. An economist with IHS Global Insight, Patrick Newport, said the sales are completely dependant on the economic condition. In the west, the rate of unemployment was 10.5 per cent, which is the highest that any region had recorded.

Newport said that the economy is in such a poor condition that the decrease in home prices is not having any effect. People are not being able to take advantage of the lower tax credit and mortgage rates. Nationwide, the sale of homes has increased by 6 per cent from the previous year. The main reason behind this is homes have become more affordable than before. The median price of homes fell by 15 per cent to $178,400.

The recession may weigh heavily on the west, yet many large metros saw improvement in home sales. There are some regions, however, where home sales plummeted. Phoenix, Billings, Mont, Las Vegas, Los Angeles, San Francisco, San Diego, are some of the regions where home sales have increased. In others like Honolulu, Seattle and Denver, home sales have tumbled.

According to experts, home values plummeted in Las Vegas. The median sales price has sunk by 40 per cent at least bringing the figure to $125,000. A broker, Rosa Herwick said that her company has handled thrice as much of sales in July as compared to a year earlier. The majority are buying homes for the first time while many are investors who are striking an all-cash deal.

The investors are buying the lower-end properties and then giving them out on rent. Herwick says that the August transactions will be slightly lower but it will be definitely more than last year. The broker also observes that there are multiple offers on homes that are priced below $300,000.

Most of the homes in Las Vegas are for short sale where the homeowner usually sells the home at a price which is lower than what he owes.