Foreclosures Witness a Decline in the Second Quarter as their Market Demand Rises

With tax credits increasing real estate prices in the U.S housing industry, the percentage of home owners who are facing impending foreclosures has seen a marked decrease in the second quarter. According to some of the most trusted real estate data providers on foreclosures, the average percentage of home owners defaulting on their mortgage has decreased from last year’s 23% to this years earlier number of 22.5% which has further gone down to 21.5 % in the second quarter.

One of the regions which have witnessed the decline on the number of foreclosures is California, the most populous state in the U.S where the real estate market has received a considerable boost in the foreclosure sector. The major reason for the decline in foreclosure properties in the state is directly a result of the large number of benefits that have been floated for home buyers by the state as well as the federal housing departments. While the selling prices of foreclosed homes has climbed up by 7% over the last quarter in California, areas like Los Angeles and San Francisco have recorded an upsurge of 5.5% and 5.9% respectively.

With a 7.3% increase in the prices of foreclosures tracked in San Diego, this region is also showing promise of a decline in repossessed properties.

According to a chief economist at a real estate research agency, the State of California will continue to see a rise in demand for buying foreclosures as home buyers are being encouraged by the recently launched double tax credit offer for first time buyers. While the previous tax incentive programs helped home buyers to qualify for a credit of up to $8000 the recently launched offer has increased the credit limit to $10,000 which has thereby made the option of buying foreclosures a highly attractive deal for home buyers.

The trend in the number of foreclosures across the country has reached a rate of one property being foreclosed in every 1000 homes mainly by banks due to negative equity. According to a recent report released by CNN, home values have reached a median of $185,000 across the country which is mainly due to the surge of properties being repossessed by banks and mortgage companies. As the number of foreclosures is increasing steadily, the various incentives being launched by the housing authorities are resulting in these properties being picked up by home buyers. This cyclical trend is therefore resulting in an overall decline on foreclosed homes as the rate at which the properties are being bought is exceeding the rate at which they are being repossessed by mending agents.