Current Events, Foreclosures, Home Prices, Negative Equity, Short Sales

Foreclosures hurting home sellers

  

From CNN:

Selling a home in this market is hard enough. Competing in a neighborhood flooded with foreclosed homes that are heavily discounted is nearly impossible.

There are nearly a million repossessed homes on the market right now. And these homes, dubbed in the industry as REO (real estate owned) properties, are being marketed by the most motivated of all sellers - that is, the lenders stuck holding the bag when homeowners default.

On average, foreclosed homes are priced almost 40% lower than normal real estate listings, according to data supplied by Trulia.com, the real estate Web site.

“Distressed sales [like foreclosures and short sales] put pressure on the whole market,” said Robert Kleinhenz, an economist with the California Association of Realtors.

Well, that’s obvious.

Still, with foreclosures and short sales now making up 45 percent of all home sales, it’s hard to argue that they truly are “distressed” sales. Instead, they’re the norm, and the downward pressure they put on home prices only reinforces itself as more and more sellers turn to short sales to sell their homes - or walk away from a property worth much less than the mortgage, and let it fall into foreclosure.

 

Still wondering what foreclosure is all about?, originally uploaded by peternamara1.

speak up

Add your comment below, or trackback from your own site.

Subscribe to these comments.

Be nice. Keep it clean. Stay on topic. No spam.

You can use these tags: <a href="" title=""> <abbr title=""> <acronym title=""> <b> <blockquote cite=""> <cite> <code> <del datetime=""> <em> <i> <q cite=""> <strike> <strong>

*Required Fields