Survey: High Share of Distressed Properties Keeps Prices Down

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Education & Training with Browning Real Estate School/REO Institute

 

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Inventory is shrinking and traffic for homebuyers seems to be increasing, but according to the Campbell/Inside Mortgage Finance HousingPulse Tracking Survey, home prices were down in March. One reason for this, according to the survey, which includes about 2,500 real estate agents, is the high number of distressed properties on the market.

Home prices for non-distressed properties in March dropped 5.7 percent from a year ago in March 2011. Prices for damaged REO properties also saw a 5.7 percent decline in prices, while move-in ready REO prices fell 2.5 percent during the same period. Short sales declined significantly, with prices falling 14.3 percent during the one-year period.

According to a recent RealtyTrac report, the average price of a home sold via short sale in January 2012 was $174,120, down 10 percent from January 2011. This, RealtyTrac stated, shows that lenders are more willing to approve more aggressively priced short sales.

Driven by an increase in short sales, the total share of distressed properties in the housing market in March was 47.7 percent when using a three-month moving average, according to the HousingPulse Distressed Property Index (DPI). This marks the 25th consecutive month the index has hovered over the 40 percent mark.

"With nearly half of the market being distressed, we’re a long way from a return to a normal market,” said Thomas Popik, research director at Campbell Surveys. “Agents responding to our survey say that homeowners with well-maintained properties in good locations are very reluctant to list at today’s prices. That’s why inventory is low-and also why forced REO and short sales are such a big proportion of the remaining market.”

Over the past six months, the proportion of short sale transactions in the housing market increased from 17.8 percent to 19.9 percent.

The survey also found that traffic indexes for first-time homebuyers, current homeowners, and investors all showed substantial increases in March compared to the year before, with indexes showing current homeowners and investors were higher than those recorded when the federal homebuyer’s tax credit was offered in 2009 and 2010.

Meanwhile, HousingPulse found that real estate agents reported housing inventories well below levels seen a year ago, especially for attractive properties in desirable locations.

What Agents Said in the Survey

“[Purchase] Activity has increased while prices continue to fall. There is a significant increase in the number of short sales and foreclosures on the market in our area.” – Agent in Delaware.

“Sales are up 29 percent year-to-date through the end [of] March. Pendings are up 55 percent. Prices just are beginning to rise.” – Agent from California.

“Volume is increasing, but prices are not. Only very nice homes are selling faster.” – Agent in Pennsylvania.

Posted by

James A. Browning MRE, CIPS, CDEI, REOCertified®, CEC, BPOR, ShortSaleCertified®, SFR

NAR, ABR, REBAC, CAR, CREOBA, REO Institute, National Speaker/Educator

CEO, Founder, REO Institute

Author, Best Selling: BPO & REO Simplified, "How to Work With Asset Managers"!

Office: 303-465-2889

Cell: 303-668-7053

Fax: 303-465-3778

Re1agent@aol.com

www.BrowningRealEstateSchool.com

www.REOInstituteColorado.com

 

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Rainmaker
996,044
Karen Anne Stone
Fort Worth Real Estate
New Home Hunters of Fort Worth and Tarrant County

I sure wish you geniuses would report the news as being true in certain areas, but NOT in others.  I am in the Fort Worth market area, and prices are NOT dropping.  Inventory is down, multiple offers are often the case... and so-called "news" like what you are publishing only confuses local buyers and sellers.

Also... in this market area... Short Sales are the exception, not the norm.  This post is just an exercise in Sensationalism.

April 29, 2012 07:56 PM
Rainmaker
153,242
James A. Browning
MRE REOCertified(R) SSCertified
Browning Real Estate School/REO Institute

If you dislike or like this article, join our group on LinkedIn, ‘REO Institute’. We value your opinions and comments about the distressed market or the improving market? Join the group and voice your opinion, do you have the nerve?

April 29, 2012 09:17 PM
Rainmaker
996,044
Karen Anne Stone
Fort Worth Real Estate
New Home Hunters of Fort Worth and Tarrant County

Of course I have the nerve.  Why wouldn't I ?  It's just a question of why would I want to ?  If your group was somewhere else other than LinkedIn... I might consider it... but at this time in my career, LinkedIn just serves no purpose for me.

I also notice that you have amended your post at least four times since I wrote my above comment.  I commend you for trying to get it right.  That speaks well of you.

April 29, 2012 09:32 PM
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Rainmaker
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James A. Browning

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