Housing Markets With More REO Properties for Sale to Come

Data released by the National Association of Realtors showed that May sales of existing homes increased by 2.4 percent, while new homes sales dropped 0.6 percent. The May sales of existing homes represented two consecutive months of increases but real estate experts are cautious in saying the housing market is showing signs of recovery.

They pointed out that REO properties for sale still accounted for almost a third of the total sales, while 29 percent of deals were made to first-time homebuyers who took advantage of the $8,000 federal tax credit.

There were cities that showed a slowing down of home price declines, including Denver, Colorado and Boston, Massachusetts. But in some cities, homebuyers can still take advantage of the further price declines in REO properties for sale.

In Detroit, Michigan housing prices declined 4.9 percent last March, according to the Case-Shiller Index. The March decline was the steepest in the city’s history since January 1991. Currently, houses in the city are selling at prices comparable with 1995. Standard and Poor’s vice president of index services Maureen Maitland attributed the sharp price decline to the collapse of the automobile industry in the city.

New York City saw its steepest monthly home price decline in March at 2.5 percent. Maitland pointed out that the crisis and massive layoffs in the financial markets may continue to make New York City a haven for homebuyers looking for cheap REO properties for sale.

Meanwhile, median home prices in Portland, Oregon declined by 2.1 percent in March. Integrated Asset Services President Dave McCarthy said that the city is trying to stay above the national average of home prices, but is starting to experience some effects of the foreclosure crisis made even worst by its 11.6 percent unemployment rate which is above the national average of 8.9 percent.

In Phoenix, Arizona, home prices dropped 53 percent from their high in June 2006. Last March, the city’s home prices declined 4.5 percent. And the city is still suffering from overbuilding which could delay the turnaround of home prices by two or three years.

On the other hand, home prices in Minneapolis, Minnesota dropped 6.1 percent in March. The Federal Reserve Board’s Beige Book stated that more than 50 percent of March housing sales in the city were REO properties for sale.

Real estate experts agree that trends once again showed that where REO properties for sale are abundant, home prices are languishing below market values.

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