Nearly One In Four Q2 Home Purchased Was A Foreclosure
ReutersToday
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Nearly one in every four homes in this country sold in the second quarter was a deeply discounted foreclosed house, putting the market on pace to work through distressed properties in about three years, RealtyTrac said.
Banks stepped up foreclosures through the summer and will take over a record 1.2 million homes this year, up from around 1 million last year and about 100,000 in 2005 before the housing bust, according to a forecast from the real estate data company.
Foreclosed homes accounted for 24 percent of all second-quarter sales, at an average price discount of more than 26 percent compared with homes not in the foreclosure process.
"This is the kind of volume of activity that we need to see for the market to heal," RealtyTrac Senior Vice President Rick Sharga said in an interview.
"Our projections have been that we will get through the distressed inventory largely by the end of 2013, and these kinds of numbers are on target to get us there," he said.
The share of foreclosure sales fell from the first quarter, when nearly one in three sales was a foreclosed house sold at an average 27 percent discount, RealtyTrac said in the report released on Thursday.
"In a normal market you're looking at foreclosure sales accounting for low single-digit percentages, probably less than 5 percent of all sales," said Sharga. For the next few years, "it's probably going to be somewhere between one-quarter and one-third of all sales."
Overall housing sales likely will total 4 million to 4.5 million a year during this time, he said.
It will take those years to resell homes lost by owners whose jobs or wages were cut or who took out high-risk, unaffordable mortgages. Banks will also need to sell homes from owners who walked away owing more on their mortgage than the house was worth.
Unemployment at 9.6 percent, and average home prices that are about 28 percent below 2006 peaks, are keeping the nation's housing market from staging much of a recovery.
A burst of spring sales to buyers seeking up to $8,000 in tax credits has been followed by a sales plunge after the incentive ended on April 30.
Some buyers likely used the tax credit as a discount, rather than buy a foreclosed house.
James J. Saccacio, RealtyTrac's chief executive, said "the removal of the tax credit could drive more buyers back to discounted short sales and REOs," or real-estate owned homes.
Distressed homes, or ones in foreclosure or short sales, rose to 34 percent of all existing houses sold in August from 32 percent in July and 31 percent a year ago, the National Association of Realtors said last week. (Reuters)

Great news for the economy!!!I heard forclosures are good:rotf2:

As as real esate broker in Mass My figures show that foreclosures are about 30% of my office volume, short sales are 50% and conventional sales 20%. With smart young kids buying cheap with low interest rates. My thoughts are that we are going to see real estate prices continue to drop for the next few years and then rise and rise again as these kids continue to enter the market. There is a mni-boom gernation comming up of about 31 million kids between the ages of 26-31. They should pull us out of the real estate slump as long as they can find jobs.

I would expect the entry level housing market to continue to lead the market for the next 5-7 years and then the rest of the market to slowly rise as these kids trade up.

Agree this will keep prices lower, but if income is stagnant people can't afford rising prices anyway.

Sounds like the free market cleaning things up.

-spence

Sounds like the free market cleaning things up.

-spence

We need the government to come in and give us all jobs
and a free house.
Ya, that will do it.

As as real esate broker in Mass My figures show that foreclosures are about 30% of my office volume, short sales are 50% and conventional sales 20%. With smart young kids buying cheap with low interest rates. My thoughts are that we are going to see real estate prices continue to drop for the next few years and then rise and rise again as these kids continue to enter the market. There is a mni-boom gernation comming up of about 31 million kids between the ages of 26-31. They should pull us out of the real estate slump as long as they can find jobs.

I would expect the entry level housing market to continue to lead the market for the next 5-7 years and then the rest of the market to slowly rise as these kids trade up.

Duck41, since you are close to the industry, What kind of impact does this have on the 2nd home market (vacation home). I'd love to try and get into a vacation shack on the Cape in about 5 years or so (provided I still have a job)

We are trying to take advantage of just that situation for last several months. We are unfortunately hoping someone else s misfortune will turn into our fortune.

With record low interest rates there is no better time to buy then now, if one can afford to buy a first or second home. No one can predict the market 4 -5 years down the road. Real estate is a roller coaster ride, the market goes up and down as we have noticed since 2005. They that have purchased a home in 2004 - 2005 were the first to be short saled or foreclosed on, next came the ARM(adjusted rate mortgages) and jumbos came due and you could say that sticker shock set in when their payments doubled and homeowners could not afford the payments

If purchasing a 2nd home you may have to have a down payment of twenty five percent, lender may consider it investment property. When is a good time to purchase, when you want to buy. Do not under estimate the real cost of owning a 2nd home, there are maintence cost as is with the first home. In most or all cases of owning a vacation home capital gaines exemptions do not apply.

Should seek professional advice from a CPA prior to purchasing a 2nd home. There are strict IRS rules, 14 day rule when renting out a 2nd home. Your deductions are limited if you use the property for personal reasons for more then 14 days a year or if at least ten percent of the total rental days are for personal use.

Minimize your tax burden and use an accountant if you do it legally.

NOT ALL FORECLOSed homes are discounted .

many REO /sellers .are still listing their properties TOOOOOOOOOOOOOOO %$%$%$%$in high .

also if you do find a REO property that is priced right & in good shape . chances are its going to sell @ 90% of market value .
also most of the lending is FHa/VA unless you have 20% down ........ fha/va have very strict guidelines / which makes many of the properties untouchable to many young buyers ;

the moveup buyer is the once that is stuck . most can,t buy uless they sell & if they are working with a agent that tells them no worries ........... buy outright yours will sell quick or to take the old so called bride loan ....................ya best get ya ass away from that agent ...... they need a sale reeeeeeeeeeeal bad & @ your expense .

Another thing with trying to buy REO properties is >they WILL not go into a sales contract with a buyer that has a property to sell //even if its in deposit ;;

another thing to consider is .......REO,s are sold [[AS IS >WHERE IS} & too many buyers will sign off on not having inspections ...because this is their DREAM home /...................................... big mistake ......2 reasons .......1st .they maybe willing to forego a inspections , but their lenders isn,t .
The seller of a REO property / even thro they say [as is] get a good buyers agent that knows what & how to deal with REO agents & their sellers .
If my buyers want a inspection they get it / if they don,t want it & they arn,t investors . I make them get it .
depending on who the seller is / the asset company / & the agent ...... sometimes I can get more for my buyers from a reo / bank owned seller than you can from a convential deal w/ a O/O seller .

a few of the other things that you may like to know is that many of the REO properties are in urban area,s / usually a higher than average crime rate & a pretty good chance its been [cleaned] out .
The investor that knows his or her s hit ... Is/Will & continue to be the ones that are >>some making money right away .some within a few months & all in 5 years .
the breakdown / some will buy a property /not in really bad shape @ a really good price /but some money into it & FLIP it now .
there are the urban & suburban investors ..... the sub .many times this is new to them & they don,t want problems so they buy outside the city ..usually single family //they usually don,t have alot of backup money [if case]
the city investor 1,2 ,3

1/ buys right ...flips
2, buys MFR ideally 3 units w/ 3 beds in each .........1st thing they do is spend real good money on a high end motion detector system / so while they repair their investment / it stayed repaired ...... they go staight & get it approved for section 8 .......................... now they have 3 top of the line rents going directly to them / the tenant nevers sees it to spend it .these guys are making big bucks

3,rd is the same as some of the 2nds / except hes making money as he waits for the market to change .. by the time he sells . he has his money back 50 times over & when he sells he will @ least ten times what he paid /

any questions .. ask & I,ll tell you /

in 2008 when all the agents & subprime brokers went belly up .i has 66 sides & still got in all the fishing I ever wanted .

OOOps gotta go missed kickoff ;;

PS be careful on what/ where/ & how you buy ><><><>:soon:

We need the government to come in and give us all jobs
and a free house.
Ya, that will do it.

As far as the Gov't is concerned were all set,the Eco is out of the recession yeah things are GREAT!
Yeah right,I see it as another hick up & we have a long way to go,on my street that I live on there are only 18 house's and in the past 13 months six bread winners have lost there jobs.....

We are still in deep Poo Poo

there are second home loans that require 10% down. Second homes sales are way down. I am watching Prudence Island want to grab one if I can. Prices have dropped there 50%. You can get a home for under $250K.

How do you find a list of foreclosed homes without having to pay for them?

call your realtor

Who can de-clammer the clammer?

I received two REO properties since last night ;

1/ is 4500 sf single familty in Providence . I was wondering what could be that big & a SFR in Providence.it sold in 2005 for 310K .........................I just got back ....its a mess & stripped . I,m going to have real problems getting comps for this shack .looking like a less than 99k list price;;;

I walk in the door & i get a 4000 sf in E/G that was built in 2005 & sold in 2005 for 1160K .

I,d rather have ten of the 1st one .no ones buying 1000000 properties / unless its there 2nd home & its waterfront or something super special/location ::

bring up the scup price ><><><>:fishin:

How do you find a list of foreclosed homes without having to pay for them?

Go to your county deeds office and they will be happy to assist you. I'm not sure but you may be in Northern Bristol County. Taunton Mass may be the closest deeds office.

11 Court St. phone 508-822-0502

They should have a list of pre- foreclosures and foreclosed properties.

Never, ever use the listing Realtor. Only use a Realtor that will represent you, the buyer exclusively. Do not get yourself into a duel agency position with the listing broker, they can not help you to negotiate

Go to your county deeds office and they will be happy to assist you. I'm not sure but you may be in Northern Bristol County. Taunton Mass may be the closest deeds office.

11 Court St. phone 508-822-0502

They should have a list of pre- foreclosures and foreclosed properties.

Never, ever use the listing Realtor. Only use a Realtor that will represent you, the buyer exclusively. Do not get yourself into a duel agency position with the listing broker, they can not help you to negotiate

Thanks Fly Rod!!!

We need the government to come in and give us all jobs
and a free house.
Ya, that will do it.

Where the hell have you been. You don't need to work to get paid and get free or very cheap housing. Plus you would have more time to fish. The free healthcare is also great. You can get some heavy duty pain meds that you don't need for FREE.You can sell these for extra beer and fishing money.
And if you have kids you can come to the pediatrics where I take my kid. I have to make a co-pay but you won't have to. Why work and struggle?

FR

FYI ........ I really doubt if any town has a list of preforclosure ... the closest your going to get to that is .see if they give to access to all property taxes .look for the ones that arn,t being paid ..even that isn,t really good .

as far as foreclosed deeds // many sellers don,t record right away / not like a conventional sale where its recorded the same day .

I have a property that is in deposit & the buyer is hot to close early . I contacted the sellers attorney << which to make it more of a PIA is in another state . The paralegal told me that they hadn,t recorded yet >>>>>>>>>>> and many times the sellers attorney is not the same attorney that did the actual foreclose . So when paperwork is f $%^&*( up . there usually isn,t a direct souce to go to to get it straight.

By law they have to advertize it 3 straight weeks in the local paper .
it gives all the information except what is owed on the property .
If your planning on attenting the actual foreclosure / where the property is open for bids .......called the attorny,s office early that day .......many times they are put off or a time/date change ;;

good luck :buds:

Besides my above post that was more of a hijack/rant. Like Duke said talk to your real estate agent. And if you don't have one it seems there are a couple on the site. They will email you every foreclosure or short sale in your range everyday for free. And like Clammer said the advertised ones are put off to another date more than 90 % of the time. Once a FC is published, alot of the times the people will file chapter 13 and buy more time or work out a modification with their current lender. So it would make chasing a public record a nightmare. Talk to a pro. They will help for free and would love your business.

As a mortgage loan officer that tries to focus on bank owned sales, this number doesn’t surprise me at all. I wonder what the statistic is for the rest of the home sales being short sales. It is unfortunate that the number of foreclosed homes is so significant but with the prices being reasonable first time buyers are able to get into homes that would have been insanely out of their reach just 4-5 years ago.

When a government backed FHA mortgage is requiring 3.5% down payment, and you can have a sellers concession towards closing costs of 3% of the sales price most buyers will only have to pay for their escrow accounts and down payment. A special program is available on Fannie Mae foreclosures, called the HomePath Program (Fannie Mae REO Homes For Sale - HomePath.com (http://www.homepath.com) to search for them exclusively), that opts for 3% down payment on an owner occupied single family home and as low as 10% down for an investor on a single family. The government really wants these homes occupied.

For traditional conventional home loans, owner occupied, you can't purchase with less than 10% down and if your FICO (credit score) is less than 700 you would need to put 20% down. This is the same on second homes you need to put 20% down because the MI companies will not insure a second home. (20% down means no MI). If you are investing you are facing 25% down on each property.

Now there is a good rumor that another large wave of foreclosed properties will be released onto the market in the near future and this will hopefully attract more buyers. This is also unfortunately going to affect the current values of everyone’s existing home, however there will be stabilization once the foreclosures are occupied ( it is anyone’s guess as to when we will see a steady increase is real estate values). Many people want to search for foreclosed properties but the better search criteria will be based on sale price not type of sale. it is honestly easier to buy a regular retail sold home than a foreclosure because all parties are local, local sellers, buyers attorneys and agents. When a REO property is sold the agents are local and the asset managers in charge of selling the home as well as the sellers attorney are often states away and very, very difficult to deal with.


If anyone would like to talk personally about foreclosures send me a PM with your phone number and I will gladly reach out to you.