WASHINGTON – April 27, 2011 – A wave of foreclosures is forcing down home prices in most major U.S. cities. But economists and real estate agents are noticing what they call a key first step for any housing recovery: a drop in the glut of homes for sale in markets hit hardest by foreclosures.
Low prices are leading investors to snap up foreclosed homes in Detroit, Las Vegas, Miami, Phoenix and Tampa. Those cut-rate sales are reducing prices in the short run. Yet they’re also thinning the supply of homes – clearing the way for higher prices in the long run.
For some buyers, the deals are now too good to pass up. A studio apartment on the Las Vegas strip that cost $500,000 at the height of the housing boom is now selling for roughly one-third that price. Half the homes listed in the Tampa Bay area are selling for less than $100,000, not far from some of Florida’s top Gulf Coast beaches.
Such sales have helped shrink the combined supply of unsold homes in those five cities by 13 percent over the past year, according to local listing data analyzed by The Associated Press. Home prices in each of those markets are at or below 2002 levels, according to the latest reading of the Standard & Poor’s/Case Shiller 20-city home price index.
“If we were to see several consecutive months of supply getting smaller, it would point to an improving housing market,” said Celia Chen, senior director at Moody’s Analytics. “Even if it is investors buying them, they are renting them out in hopes that prices in the next several years will rise.”
Economists caution that a second wave of foreclosures, those that have been delayed by banks and backlogged courts, could throw the housing market back into turmoil. And few see home prices rebounding before the end of this year.
Home prices fell from January to February in 19 of the 20 metro markets tracked by the Case-Shiller index. At least 10 major metro areas are at their lowest point since the housing bubble burst. The index, released Tuesday, is slightly above the level reached in April 2009, the lowest point since the downturn began.
Getting rid of foreclosures and other risky properties is necessary for the market to turn around. When foreclosures and distressed properties are sold, home prices fall.
But as the supply of cheap homes shrinks, prices stabilize. Homeowners who had put off moving because they didn’t want to sell during the downturn grow confident that they can fetch a decent price. That prompts more buying and selling. Prices rise more.
Most of the current foreclosure sales involve investors: Private equity firms; foreign and out-of-state buyers seeking vacation houses; individual investors hoping to rent out or quickly sell properties for a profit.
Many are scooping up cheap homes with cash, said Andrew Duncan, a Realtor who runs a Keller Williams franchise in Tampa. In March, 35 percent of previously occupied homes sold were bought entirely in cash, according to the National Association of Realtors.
“When the bargains do hit, there’s more than one buyer looking for that bargain,” Duncan said. “Buyers are losing out left and right when they bid because it’s just so competitive.”
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More of the article taking about Miami and other places.
Link at the bottom for that info.
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“It’s like a feeding frenzy when a home goes on the market now,” said Mike Shannon, a Detroit real estate agent who specializes in foreclosures. “We’re getting a few dozen offers on some homes in a matter of days.”
The thinning supply is due, in part, to a lull in foreclosures. They’ve dropped more than 56 percent in Tampa and nearly 64 percent in Miami. In those areas, the number of homes receiving an initial foreclosure notice has plummeted.
That could change quickly. Many banks are revisiting thousands of foreclosure cases. They’ve been spurred into action by federal regulators who have ordered reviews of how foreclosures were carried out over the past two years.
The logjam has been compounded in states such as Florida, New York and New Jersey, where a judge must approve foreclosures.
There are 1.2 million foreclosures expected this year nationally, according to foreclosure tracker RealtyTrac Inc., and the decline in foreclosure filings is only temporary, said Mark Vitner, senior economist at Wells Fargo.
“The problems are still there,” Vitner said. “There are fewer early-stage delinquencies, so we are moving in the right direction. But the slowdown in foreclosures is just drawing the process out.”
Copyright © 2011 The Associated Press, Derek Kravitz and Janna Herron, AP business writers. All rights reserved. This material may not be published, broadcast, rewritten or redistributed.
Read full article here
http://www.floridarealtors.org/NewsAndEvents/article.cfm?id=259256
==================================
What does this all mean?
If you are buying ElCheapo houses there are lots of people scrambling for them They are not going down much farther. Its call being at the bottom.
Houses $100,000 ish up to $200,000 will go down a little more.
Homes over $200,000 will continue to go down for another couple years.
Large homes over $400,000 will go down. ONce we start having more jobs and tourists here then this houses will bottom and start to go up.
Kissimmee and Poinciana is at the bottom or may go down a little more. It will start to go up End of this year or next year. From my sources the parks attendance will be greater than last year. That means more jobs and with steady income people will buy houses in these areas.
With More foreclosures the house prices may go down a touch more and that is just because of sheer numbers. However all the systems are now in place and investors from all over are starting to buy now. Now is the time to buy. All the investors are in a feeding Frenzy for the El Cheapos so they are not going after houses that need little or no work in aprox $100,000 range. Great deals with now with very little work. You need a GREAT REALTOR Like me to help with this. I know some great homes that are in good areas. I also have good contacts for Brand new homes built in 2010 to present.
I do think the Condo market will go down more. This will continue until two things happen. one, Banks start to lend on them. Or two, banks or owners start to offer Owner Finanacing. I can help with both right now. I think condos are cheaper now than houses. Tremendous deals are there. Especially in Downtown Orlando.
If you own Condos in Downtown Orlando I can sell them for you.
Low prices are leading investors to snap up foreclosed homes in Detroit, Las Vegas, Miami, Phoenix and Tampa. Those cut-rate sales are reducing prices in the short run. Yet they’re also thinning the supply of homes – clearing the way for higher prices in the long run.
For some buyers, the deals are now too good to pass up. A studio apartment on the Las Vegas strip that cost $500,000 at the height of the housing boom is now selling for roughly one-third that price. Half the homes listed in the Tampa Bay area are selling for less than $100,000, not far from some of Florida’s top Gulf Coast beaches.
Such sales have helped shrink the combined supply of unsold homes in those five cities by 13 percent over the past year, according to local listing data analyzed by The Associated Press. Home prices in each of those markets are at or below 2002 levels, according to the latest reading of the Standard & Poor’s/Case Shiller 20-city home price index.
“If we were to see several consecutive months of supply getting smaller, it would point to an improving housing market,” said Celia Chen, senior director at Moody’s Analytics. “Even if it is investors buying them, they are renting them out in hopes that prices in the next several years will rise.”
Economists caution that a second wave of foreclosures, those that have been delayed by banks and backlogged courts, could throw the housing market back into turmoil. And few see home prices rebounding before the end of this year.
Home prices fell from January to February in 19 of the 20 metro markets tracked by the Case-Shiller index. At least 10 major metro areas are at their lowest point since the housing bubble burst. The index, released Tuesday, is slightly above the level reached in April 2009, the lowest point since the downturn began.
Getting rid of foreclosures and other risky properties is necessary for the market to turn around. When foreclosures and distressed properties are sold, home prices fall.
But as the supply of cheap homes shrinks, prices stabilize. Homeowners who had put off moving because they didn’t want to sell during the downturn grow confident that they can fetch a decent price. That prompts more buying and selling. Prices rise more.
Most of the current foreclosure sales involve investors: Private equity firms; foreign and out-of-state buyers seeking vacation houses; individual investors hoping to rent out or quickly sell properties for a profit.
Many are scooping up cheap homes with cash, said Andrew Duncan, a Realtor who runs a Keller Williams franchise in Tampa. In March, 35 percent of previously occupied homes sold were bought entirely in cash, according to the National Association of Realtors.
“When the bargains do hit, there’s more than one buyer looking for that bargain,” Duncan said. “Buyers are losing out left and right when they bid because it’s just so competitive.”
=============================
More of the article taking about Miami and other places.
Link at the bottom for that info.
-------------------------------------------
“It’s like a feeding frenzy when a home goes on the market now,” said Mike Shannon, a Detroit real estate agent who specializes in foreclosures. “We’re getting a few dozen offers on some homes in a matter of days.”
The thinning supply is due, in part, to a lull in foreclosures. They’ve dropped more than 56 percent in Tampa and nearly 64 percent in Miami. In those areas, the number of homes receiving an initial foreclosure notice has plummeted.
That could change quickly. Many banks are revisiting thousands of foreclosure cases. They’ve been spurred into action by federal regulators who have ordered reviews of how foreclosures were carried out over the past two years.
The logjam has been compounded in states such as Florida, New York and New Jersey, where a judge must approve foreclosures.
There are 1.2 million foreclosures expected this year nationally, according to foreclosure tracker RealtyTrac Inc., and the decline in foreclosure filings is only temporary, said Mark Vitner, senior economist at Wells Fargo.
“The problems are still there,” Vitner said. “There are fewer early-stage delinquencies, so we are moving in the right direction. But the slowdown in foreclosures is just drawing the process out.”
Copyright © 2011 The Associated Press, Derek Kravitz and Janna Herron, AP business writers. All rights reserved. This material may not be published, broadcast, rewritten or redistributed.
Read full article here
http://www.floridarealtors.org/NewsAndEvents/article.cfm?id=259256
==================================
What does this all mean?
If you are buying ElCheapo houses there are lots of people scrambling for them They are not going down much farther. Its call being at the bottom.
Houses $100,000 ish up to $200,000 will go down a little more.
Homes over $200,000 will continue to go down for another couple years.
Large homes over $400,000 will go down. ONce we start having more jobs and tourists here then this houses will bottom and start to go up.
Kissimmee and Poinciana is at the bottom or may go down a little more. It will start to go up End of this year or next year. From my sources the parks attendance will be greater than last year. That means more jobs and with steady income people will buy houses in these areas.
With More foreclosures the house prices may go down a touch more and that is just because of sheer numbers. However all the systems are now in place and investors from all over are starting to buy now. Now is the time to buy. All the investors are in a feeding Frenzy for the El Cheapos so they are not going after houses that need little or no work in aprox $100,000 range. Great deals with now with very little work. You need a GREAT REALTOR Like me to help with this. I know some great homes that are in good areas. I also have good contacts for Brand new homes built in 2010 to present.
I do think the Condo market will go down more. This will continue until two things happen. one, Banks start to lend on them. Or two, banks or owners start to offer Owner Finanacing. I can help with both right now. I think condos are cheaper now than houses. Tremendous deals are there. Especially in Downtown Orlando.
If you own Condos in Downtown Orlando I can sell them for you.
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