Foreclosed Homes for Sale Dragging US Home Prices

A report from Clear Capital revealed a 1.4 percent decline in national home prices when compared quarter by quarter. The Home Data Index Market report offers a clear picture of the current performance of the local housing markets versus national home price trends and how foreclosed homes for sale affects such performance.

Among the report’s highlights are the declining home prices in the Western part of the country comparing quarter to quarter in the last year, which is expected to drop even further in the next months. Such decline can attract buyers into investing in bank foreclosed properties since these distressed homes are usually sold at cheaper prices compared to other existing homes for sale.

Another highlight of the report revealed an increase of home prices by as much as 4.2 percent compared to two years ago. This was the only positive market indicator observed in the report and it did not encompass the majority of the housing markets.

Clear Capital believed that, although there is still a large inventory of foreclosures putting pressure on the market and a sluggish distressed home sales activity during the winter months, the present market trends clearly indicate a softening of home price declines. The quarterly decline exhibited last December has actually given way to moderate declines. And with the national home price index down to just 1.4 percent, it can be expected that the spring season will show a leveling of home prices.

In addition, home prices are actually 4.2 percent higher than the lowest of the housing crash. This just shows that it is possible to enjoy a gain in the middle of the volatile behavior of the market in the last couple of years. Of course, it is also still clear that, with the many foreclosed homes for sale still clogging the market, a sustained recovery is still far away.

The only silver lining in the otherwise dark cloud is the growing number of buyers and investors who are realizing the great return potential of buying repossessed properties. Cash buyers are also growing in numbers as they realize that the transaction is much faster and discounts are much bigger.

Nationwide, foreclosed homes for sale continue to drag home prices down. Although the latest data showed a decline in foreclosure filings, it is unclear if the decline is the result of lenders slowing down foreclosure process in order to avoid legal issues. But it is evident that there are still plenty of homeowners who are having trouble with their mortgage payments.

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