Home Price Declines Linked to Foreclosure Sales
INDUSTRY NEWS, SHASTA COUNTY, TIPS FOR SELLERS
September 24th, 2009
What seems obvious has been confirmed with market statistics published in an article in The Wall Street Journal. Those areas with the highest level of sales of REO’s also had the sharpest decline in home prices. Michigan, a state hard hit by the market downturn and the slumping auto industry, reported 64% of their home sales being foreclosures since the beginning of the year and saw home prices drop 47% in the same time period.
Massachusetts on the other hand, where only 14% of their home sales were REO’s saw only a 19% decline in home prices for the first half of 2009. Looking ahead, the fear is loan modification efforts are nearing an end and ”traditional” sellers are holding off putting their homes for sale in the current down market leading to the possibility the market will be dominated by distress sales this winter.
One reader commented they just returned from Florida and wondered if there was anything in Florida not for sale. Another commented on the fact “short sales” were not factored into the discussion. This agent from Florida claims the majority of home sold there are short sales.
Locally, foreclosures represent about 1/3 of sales activity. Prices appear to have bottomed out for properties priced at the lower end of the market with the average cost per square foot settling at about $130 in Redding. Available home inventory continues to decline and pending sales today are at their highest level for the year.
Interest rates are hovering around 5% for a 30-year mortgage and lenders are willing to make loans to qualified buyers. Investors and first-time buyers continue to dominate the marketplace. 174 homes sold in August and 1331 have closed escrow since January as reported by the Shasta MLS. 160 homes, or 92%, sold for $350,000 or less!
530-224-6767 or 530-941-7492
BRAD GARBUTT
REALTOR/BROKER ASSOCIATE
REAL ESTATE PROFESSIONALS GMAC
CORNER OF COURT AND PLACER IN REDDING
QUARTER CENTURY LOCAL SALES EXPERIENCE
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