Foreclosures Markets Situation Favorable to Buyers as Foreclosures Rise in the US
In July 2010, there has been bad news on the economic front – in terms of employment as well as the housing market. Unemployment rose to half a million people last week. On the housing front-number of foreclosures were also on the rise.
In July, for the 17th month in a row, there were more than 300,000 foreclosure filings consisting of default notices, auctions and bank repossessions. Bank repossessions have especially soared over the last eight months. Over 92,858 properties were repossessed during July. This is a 9% increase over June. It is a six percent increase over July 2009.
As repossessed homes are put for sale, housing prices will plunge further. When prices fall, more borrowers become ‘under water’- they owe more than the worth of their home. This is a big risk for default combined with figures for unemployment. According to a realtor, 1.9 million homes will be lost this year down only slightly from 2009.
This presents a buyer’s market now. Foreclosed homes for sale may be the right investment now. But some markets are a gold mine for attractive foreclosures compared to others. According to a Realty websites, the following are the top five metropolitan areas for foreclosure bargains. They selected these five regions on the basis of average discount on sales price, low rates of unemployment and positive rise of median home prices.
Here is the list:
- Memphis, Tenn.: 37% of properties were foreclosures sold in quarter one. Discount was an average of about 53%. $72,904 was the price (average) of a Memphis foreclosed home. Between first quarter last year and this year, home prices increased by 18.5%.
- Milwaukee- Waukesha- West Allis, Wis.: 22% of homes sold in quarter one were foreclosures. They implied a discount of up to 48%. $89,839 was counted as average cost of foreclosed homes and prices of homes rose by an average of 6.8% during the year.
- Buffalo-Niagara Falls, N.Y.: 8% of 800 homes sold in quarter one were foreclosed homes available at a discount of about 47%. The average price of a foreclosed home was $57, 191. Prices of homes rose by 7.5% during the year.
- Cleveland- Elyria- Mentor, Ohio: 27% of home sold in quarter one were foreclosures and average discount rate was 45%. $71, 438 was the average price of a foreclosed home. But the area has experienced good price appreciation with prices climbing by 53.8%
- San Francisco-Oakland- Fremont, Calif.: 45% of properties sold in quarter one were foreclosures selling at 41% discount. The average price of foreclosure was $327,262. Home prices surged by 28.9% compared to last year.
These are the best markets for investing in foreclosures in the nation.