Distressed Properties Sale Articles

A study of home market prices in 20 metropolitan areas last March showed a moderate decline in figures despite an increase in the number of repossessed homes. Economists agreed that the slow pace of home price decline is indicating towards a moderate housing crisis.

The home price S&P/Case-Shiller index dropped by 18.4 percent compared with figures from last year and a decline of 18.6 percent in February. Meanwhile, a market study showed that consumer confidence increased to a half-year high this month.

Declining mortgage rates and home prices have made properties affordable, softening the drop in sales and preventing the housing market slump from further deterioration. However, the increasing unemployment and unabated foreclosures will continue to put pressure on values of properties and prevent the housing market from doing a fast recovery.

Herrmann Forecasting chief economist John Herrmann pointed out that things in the housing market are starting to stabilize while the inventory of homes still on the market is showing signs of lessening.

Meanwhile, the Conference Board is expected to report an improvement in the consumer confidence index, with a 43 percent rise this month from 39.2 in April. The May consumer confidence rate was the highest since November last year.

On the other hand, the drop in home prices due to the flood of foreclosure homes in the country has driven resales in the housing market. According to economists, the National Association of Realtors data showed that existing home sales increased by 4.66 million in April.

The association said that distressed properties accounted for about 50 percent of home resales in March, while first-time homebuyers acquired 51 percent of properties in the same month.

In April, filings for repossessed homes in the country increased further for two consecutive months, with a total of 342,038 homeowners receiving notices of default or auction. The figures showed that one out of 374 homeowners received a foreclosure filing.

However, despite the rise in the number of repossessed homes, some companies are optimistic that property demand is stabilizing.

According to Robert Toll, chief executive officer of Toll Brothers Inc, deposits for new homes increase in the company’s fiscal second quarter compared with figures from a year ago.

He added that the average home sale price declined to $563,000 in the company’s fiscal second quarter as filings for repossessed homes rose again to another record high.

The viability of many small banks nationwide is increasingly put in doubt as the banks experience decimation of capital due to massive loan losses from commercial foreclosure properties.

In Florida and Atlanta, more than 50 regional and community banks have reported that the level of their non-performing assets have surpassed 10 percent of overall assets as of March 31, based on research by investment banking firm Carson Medlin of North Carolina.

Non-performing assets refer to loans not earning principal or interest payments, such as foreclosure properties. In normal economic times, the level of non-performing assets should be below 1 percent.

Initially, regional and community banks, which have been providing loans to many small businesses and individual investors across the nation, were not affected by the problem of foreclosures that downed the nation’s big banks.

Banking analysts contend that most of the around 8,000 regional and community banking firms nationwide are operating in healthy conditions. But they also have seen many of them struggling from big losses from commercial foreclosure properties and defaulting business loans.

The Federal Deposit Insurance Corp. is set to publish its assessment of banks for the first quarter, including a list of struggling banks.

As of December 2008, there were 252 banking institutions that are struggling. Due to the rising number of foreclosed commercial properties, the troubled bank list is expected to expand with more additions.

As of date, the FDIC has closed 34 banking institutions, including Florida-based BankUnited which was closed and sold to an alliance of private investors last week.

Several analysts also contend that banking regulators have not been rushing in closing problem banks because of factors such as lack of potential buyers, lack of FDIC personnel to administer troubled banks and search for alternative solutions to the problem of commercial foreclosure properties.

An illustrative case is that of Citizens Community Bank which is based in New Jersey. FDIC took over the bank only this month despite the financial problems of the bank arising from commercial foreclosure properties.

Nick Ketcha Jr., managing director of New Jersey financial consulting firm Fin Pro, said Citizens Bank was expecting to be seized by FDIC as early as December last year. The delay shows that there are others in the same situation of Citizens.

To prepare for its battle to help small banks clobbered by commercial foreclosure properties, the FDIC increased its budget for bank receivership to a record $1 billion from just $150 million previously.

Homeowners who want to find cheap foreclosed properties to buy use the Internet to search for potential homes on repo homes listing. Today, homeowners have discovered another use for the Internet: home swapping.

The number of mortgage loss mitigations and loan modifications completed under Citigroup Inc.’s program of reducing repo property inventories in the first quarter declined by 12 percent, compared to last year’s fourth quarter.

In Los Angeles County nowadays, sheriff’s deputies carry out about 15 to 25 foreclosure home evictions a day or about 74 to 100 evictions per week.

The sad stories of two San Diego realtors and investors illustrate the harsh reality of losing from foreclosed house for sale lists despite years of training and experiences in the real estate sector.

Real estate investors have been returning to the San Diego and Riverside region, among the counties with the highest number of foreclosed homes for auction, as they compete to buy distressed properties from banks and other sellers, according to realtors in the region and based on home sales data.

Public housing agencies in the nation’s largest cities such as Los Angeles, New York City, Baltimore and Chicago are concerned that they will not receive allocations from the $1 billion funding that Congress has been seeking to give to housing authorities to stimulate housing sector activities and to fight the devastating effects of foreclosed for sale properties on communities.

The number of bank foreclosure properties in New Hampshire is a major contributor in the decline of home prices in the state. And real estate experts hope that the rising number of buyers taking advantage of low-priced properties is a sign that the housing market is starting to stabilize.

The devastating effects of foreclosure houses has not just stopped on homeowners but spread to their pets. Most homeowners who succumbed to foreclosures and abandoned their properties leave their pets behind.