First time homebuyers taking advantage of foreclosures and short sales
Filed under: People, Investing
About half of all home purchases in the first quarter of 2009 were first-time home buyers taking advantage of the deeply discounted foreclosures and short sales, as well as their $8,000 tax credit, according to the National Association of Realtors (NAR). NAR released its Metropolitan Median Prices survey for the first quarter today. However, even with the newfound interest of first time home buyers, sales were sluggish and prices continued to drop. Of 152 metropolitan statistical areas, 134 reported lower prices. Only 18 had price gains. The national median existing single-family home price was $169,000, which is 13.8 percent below the first quarter of 2008. Distressed homes are typically selling for 20 percent less than traditional homes, which is sending the median price lower.
The largest sales gains were seen in some of the hardest hit areas. Nevada was up 116.8 percent from a year ago. California was up 80.6 percent. Arizona was up 50.2 percent and Florida was up 25 percent.
The biggest increase in median price was seen n the Cumberland area of Maryland and West Virginia where prices increased 21.1 percent from a year ago. There the median price home was $114,900. The next highest jump in prices was seen in Davenport-Moline-Rock Island area of Iowa and Illinois with a increase of 13.8 percent to $100,300. The most affordable homes can be found in Saginaw, Michigan with a median price of $30,300. The highest median price is in Honolulu, at $570,000.
Taking a look at median prices regionally, you'll find the biggest decline in the West, with a drop in prices in the past year of 19.8 to a median price of $237,600. Northeast median prices dropped 15.9 percent to $235,500. The South declined 10.8 percent to $146,600. The Midwest was down 6.8 percent to $132,400.
While we're still seeing prices decline, the good news is that some people are jumping off the sidelines and getting back into the marketplace now that homes are much more affordable. There's still a lot of foreclosures and short sales out there and until that backlog is cleaned out we probably won't see any significant upswing in median prices.
Lita Epstein has written more than 25 books including The 250 Questions You Should Ask About Buying Foreclosures.
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Reader Comments (Page 1 of 1)
5-12-2009 @ 10:41AM
cmorse1052 said...
Home values would have stabilized many moons ago if banks had gone ahead and modified these loans for the existing home owners. I'm not sure if banks were operating on the principal and precedence that a conract is a contract or simply teaching people who the boss is. Instead of shoring up the real estate market, they tanked it. Understand also that this is a story strategically written to get new buyers in a failing market. Why buy now if prices are still falling? Don't take my word for it, but google news about the banks holding 600K foreclosures off the market, waiting for prices to spike. This story is the classical pump and dump.
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5-12-2009 @ 12:52PM
marc said...
You have to understand that all bank home loans are insured either through the government, FDIC or private mortgage insurance. The banks do want your home. They get paid no matter what since they are a function of the private, for profit Federal Reserve international banking cartel. They are whooing first time buyers in as fast as they can. Watch the real estate taxes skyrocket once the turnover is completed. I will never buy a home again. It's a land locked boat.
5-13-2009 @ 8:35AM
tp said...
shut up big mouth
5-12-2009 @ 12:53PM
jack doyle said...
REAL ESTATE STARTED TANKING THREE YEARS AGO WHEN PRICES REACHED 30% MORE THAT THE AVERAGE BUYER COULD AFFORD.SOME BOUGHT ANYWAY AND WERE THE FIRSST TO TAKE THE GAS PIPE.
NOW WE HAVE ALMOST 25% OF MORTGAGES HIGHER THAN EQUITY AND MORE HEADING THAT WAY.plus no end.
YOU CAN'T FIGHT TWO LOSING WARS FOR 7 YEARS AND PLUNGE THE COUNTRY INTO DEBT AND EXPECT THE POPULATION TO BE MORE STABLE THAN THE NATION.
Expect price to staiblize when unemployment stops going up but goes down.2 years from now.
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5-12-2009 @ 12:39PM
J Jones said...
All I can remember is when Ben Bernanky and the feds began to lower interest rates it when from 5.25 to 4 and so on, then it accelerate with the infamous mortgage derivatives and then the oil hitting 150 dollars a barrell with the help of Mr. D Cheyney wow the economic turmoil hit US. I just wonder what when on B. Bernanky's mind and Paul wherever (treasury secretary under GWBush) , I really think that if we are to blame anybody B. Bernanky should get the dump first at least he should get another job like teaching at community college somewhere far away where he can't harm anybody, then we should go for the rest of them.
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5-12-2009 @ 12:55PM
Juan said...
The real estate market was artificially stimulted to a point that a house realistically worth $150,000 was now $400K. Greed on the part of brokers, appraisors, mortgage loan officers, is what led to this. There are people who made a lot of money of this debacle and that is where you should start looking. In the meantime let the housing market keep plunging. When a house is back to acceptable levels then the poeple will buy.
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5-12-2009 @ 10:51PM
rhymon said...
Bravo !!!!! You hit the nail on the head!!!
5-12-2009 @ 1:58PM
Kevin said...
Paid my bills same job 25 years .Just sold a split foyer vinyl home I bought new in 1991 for almost triple the price I paid for it .Now I living in my New 3 Acre Dream Home that I bought for 70,000.00 less than the asking price. WHASYM is all I'm saying , Work Hard And Save Your Money .Finally The people who play by the rules are getting ahead for once !!!!!!!!!!!!!!!!!!!!!!!
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5-12-2009 @ 3:29PM
tJDWILL said...
This real estate market is attracting a lot of foreign money. I expect the market to stabilize much faster than many expect in many places, but some places will never recover. The real estate rules never change, location, location, location.
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5-12-2009 @ 4:34PM
jim forrester said...
foreign investors are buying up commercial real estate, condos, and apts. at an unbelievable pace. especially, coastal property, florida, texas and california coast.
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5-12-2009 @ 5:24PM
mike said...
that still pisses me off, im giving new home buyers 8k so they will buy a home,, shees wheres my 8k,, oh i didnt need help i scraped saved and worked 2 jobs to do it on my OWN WITH NO STOLEN FROM TAXPAYER MONEY INVOLVED
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5-14-2009 @ 1:45PM
Sean Clement said...
I have produced a educational DVD and WORKBOOK on how to renegotiate with your mortgage lender. We teach you who to speak with and when, how to think like a underwriter, how to fill out financial statements properly, and a whole lot more. If you know someone struggling to make ends meet.
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5-12-2009 @ 7:05PM
jim said...
I purchased 300 homes this year for pennies on the dollars...Going to sit on them for awhile..I like going after the failing banks because they will take anything for the cash..
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5-12-2009 @ 8:37PM
Donovan said...
Nothing like trying to drum up business.
What Miss Lita fails to mention is, Not only does one need to qualify for the loan in the first place. But purchasing a short sale home or foreclosure home can be very stressful for the buyer. With a short sale, your dealing with not only the bank, but with the seller as well. Even if the seller agrees to a purchase price. The bank is the one who makes the final decision if the offer will be accepted. Not to mention, the bank will hold out as long as possible, with the hope that several other offers will be presented, thus the bidding war begins. Meantime its a wait and see game. And I do mean wait. As far as a foreclosure. Buyers are better off dealing direct with the bank holding the property. Their really is no need for a Realtor. The bank will either accept your offer as a buyer or reject it. PERIOD. However, once again this will be another wait and see game, as the banks are looking for the highest offer possible. These two types of purchases can get you your dream home for cheap. However, the process can be very frustrating.
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5-12-2009 @ 9:00PM
LakeArcher said...
EVERYTHING IS THE WILL OF GOD !
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5-12-2009 @ 9:37PM
George Lesh said...
The first time home buyers are rushing in. The prices are still too high in most cases. The inflated prices from speculation and poor appraisal work led to very overinflated prices, They have to reach a true affordable value or the same round of failures will occur especially with the low down payments offered.
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5-13-2009 @ 1:21AM
Patricia said...
It seems very strange that when a home is rented by an owner who is going into foreclosure or short sales that the owner continues to collect the rent during the lease when they owe the bank. When the bank takes over the property, they evict the tenant and the house just sits empty until it is sold. Banks are holding a lot of properties that are not collecting any money. They could pay a property manager to take care of the rental stuff and have some money coming in. But that is not the case and it seems very senseless since the banks are in financial trouble.
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5-13-2009 @ 9:47AM
JJGOFAST said...
GIVE THE GOVERNMENT A PRINTING PRESS AND LOOK WHAT HAPPENS !!
THE NEWS ONLY REPORTS ON WHAT IS NEEDED TO KEEP PEOPLES SIGHT OFF OF OTHER ISSUES.
OBAMA JUST GIVE BILLIONS TO BLACK FARMERS THAT HAD SETTLED A LAW SUIT IN 1999.OBAMA SAID THAT SOME BLACK FARMERS DID NOT GET THEIR $50,000.00 CHECK AND MORE IN TAX CREDITS.
THIS IS FOR BLACK FARMERS ONLY,THE LAW SUIT WAS SETTLED,BUT OBAMA IS GIVING THEM MORE..
BLACK REPERATIONS HAVE BEGUN !!!!!
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6-07-2009 @ 5:02PM
davidcharles said...
Short Sales are a much better way to go. Foreclosed homes often sell for more than homes that are sold on the market.
The auction frenzy artificially boosts the price.
Does anyone know how long it takes after you foreclose to be able to buy a home again. The best I could find was this:
http://www.bankapedia.com/mortgage-encyclopedia/faqs/538-how-long-after-a-foreclosure-until-i-can-buy-a-home-again-
and it wasn’t too informative
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