Real Estate

Foreclosures Reflect High Percentage of Total Home Sales

Wed Jun 30, 2010 10:37 am
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It is being reported that approximately one third (31%) of all home sales are foreclosures. Well, I would think it really would have been higher than that! Prices on the foreclosures are averaging some 27% below market prices.

Given the high number of foreclosures on the market and plenty more in the "shadow inventory" one would think that buyers would be buying almost exclusively foreclosures.

Does this mean that some of the foreclosures on the market are in such poor condition that they are unsaleable or is it the fact that resale prices are deflated to the point that they are the better buy?

Moreover a high percentage of the foreclosures that have been sold have been bought buy investors. Does that portend more renters? One would reasonably conclude that to be the case.

In addition to a high percentage of foreclosure sales being the norm for an extended period, there is currently being floated the concept of doing away with or at least changing the 30 year mortgage as the standard.

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