“Foreclosures and other distressed properties account for more than a third of all home sales, and data released today suggests that figure may soon grow even bigger.
Lenders in January took back nearly 91,100 distressed properties, which includes foreclosures and short sales, up 29% from the previous month, according to data released this morning by LPS Applied Analytics, which tracks mortgage performance. In the next few months, experts say those homes will make their way back to the market to join the already high percentage of distressed homes being snatched up by buyers.
That addition of distressed properties will likely lead to further drops in home prices, says Tom Popik, research director at Campbell Surveys, a real estate research firm. Foreclosures and short sales accounted for roughly 35% of total existing home sales in January — up 16% from June, according to the National Association of Realtors. Over that period, the median home price fell 8.5% to $154,700. “Prices are going to continue to go down for a long time,” says Popik….”
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Good call to anyone who pointed out that by settling with the banks, Obama opened the door to lower housing prices.
Gotta happen sooner or later, and sooner is better. Market won’t clear until supply is entirely on the market, not merely “overhanging it.”
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