Short Sales Up Prices Down In Us Housing Market
News Posted On: 24 April 2012
According to new data from Campbell/Inside Mortgage Finance, the US housing market is continuing to bobble along in the alternate reality caused by weak demand. The firm reports that supply is falling, but prices are continuing to fall also. It says that falling supply usually brings rising prices, but demand is too low to make these “norms” compute.
Another factor is the continued high volume of distressed properties on the market. According to the firm short sales accounted for 47% of all sales in a 3 month running average, making the 25th month that distressed sales have topped 40% of all sales.
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.”
According to the report normal market house prices fell 5.7%, which is the same price reduction as was seen by damaged bank owned properties sold during the same period. Conversely, move-in-ready bank owned properties saw only a 2.6% reduction in price. This could be taken as a positive sign. If the market could find a bottomed in the REO (bank-owned) segment, then this would likely be followed by a bottom in the wider market as well, as it is bank owned properties that are continually dragging down prices of non-distressed property.
Not that us foreign investors need care about finding a bottom, that is, those of us yet to buy and who are hoping that prices will fall further so we can get even bigger bargains.
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Written by Liam Bailey
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