Canada's Condominium Magazine
With the number of foreclosed properties increasing, and average prices falling, there are opportunities for investors and ordinary buyers alike in the US real estate market.
The numbers are almost breathtaking: in the United States, 26 per cent of all residential property sales so far this year have involved properties that were in some stage of foreclosure or owned outright by the bank. This number is higher than in the same period last year (25 per cent). In some areas it’s much higher: in Nevada, fully 56 per cent of residential sales were foreclosures; in California it was 47 per cent.
To put this in perspective, in Ontario as of this past March, the number of residential mortgages in arrears was 0.26 per cent, according to the Canadian Bankers Association. By coincidence, that’s exactly 100 times fewer than in the US. For every Ontario homeowner in distress, 100 US homeowners faced losing their homes.
More than a quarter of a million distressed properties, either in pre-foreclosure for missed mortgage payments, usually sold in short sale, or scheduled to be sold at auction, were bought by third parties. The average price for foreclosed or bank-owned properties was $161,214. This was lower by 2 per cent than in the first quarter of 2011 and a whopping 27 per cent lower than the average price for a non-foreclosed property.
Brandon Moore, chief executive officer of RealtyTrac which provided these figures said, “Those pre-foreclosure sales hit a three-year high in the first quarter even as the average pre-foreclosure sales price dropped to a record low for our report. Lenders are approving more aggressively priced short sales, which in turn is resulting in more successful short sale transactions.”
Sales of homes in default or scheduled for auction (pre-foreclosure) increased by 25 per cent over last year, with an average selling price of $175,461. That price, the lowest ever, is down 10 per cent from a year ago. The increase was seen in a total of 27 states, from Wisconsin to Texas, from Massachusetts to California. In California, the average price of a foreclosure-related property was $235,042.
Readers who are interested in looking into the possibilities of purchasing a property in the US can find information about homes that are scheduled for auction at RealtyTrac.