The price of foreclosed homes falls
In 2009, there was a run to buy foreclosed homes. Why? Because their cost was substantially less than other homes. But their price is down even further now that demand has slowed. Gregory Warner reports.
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JEREMY HOBSON: The summer of 2010 was the worst for home sales in decades. But according to a closely watched survey released this morning buyers aren’t all that interested in snapping up the biggest discounts of all — foreclosed homes.
Marketplace’s Gregory Warner has the story.
GREGORY WARNER: The foreclosure buying spree of 2009 has slowed. That’s according to real estate data firm RealtyTrac. In part it’s because all home sales slowed after a popular home buyer tax credit expired in June.
DAREN BLOMQUIST: We got a stark view of what the market is like without the help of that tax credit in the third quarter and it wasn’t — it wasn’t very pretty.
RealtyTrac’s Daren Blomquist says that about one in four residential homes purchased between July and September were foreclosed. And people paid 32 percent less on average for foreclosed homes than other ones. That’s the biggest price difference since 2005. And it could increase this winter quarter.
BLOMQUIST: We do anticipate that in the fourth quarter we’ll actually see another drop in foreclosure sales, as a result of the foreclosure documentation controversy.
That controversy alleges that banks signed off on hundreds of foreclosure documents a day without proper legal review. That could make would-be buyers even more cautious about bidding on a foreclosed home only to get dragged into a long legal battle over who officially owns that house.
In Philadelphia, I’m Gregory Warner for Marketplace.