Home Prices Still Declining
During the first quarter of 2008, home prices suffered a decline averaging 7.7 percent compared to that of 2007. This is probably the greatest decline since 1982 when the National Realtors Association began gathering data. Average median sale price nationwide also dropped by 4.8 percent to $196,300 for the same period.
According to NAR, the steep decline can be attributed to problems in liquidity, which negatively affects high-price markets. For these experts, the decline in home prices came as a surprise especially since jumbo loans were quite few. In fact, about 10 percent of home sales in California were under jumbo loans. As you may know by now, California holds one of the highest foreclosures rate in the nation and home prices here have been declining steadily in the past months. They feel that this situation was caused by sluggish home sales in these high-cost places.
Another reason for such decline can be the increasing number of homes entering foreclosure due to the subprime meltdown. These foreclosed properties enter the market with lower asking prices, thus further dragging down home values.
Cities, particularly those in the Midwestern states, suffered from the weakening economy that resulted to loss of jobs and decreased consumer spending. Many homeowners have started prioritizing other expenses over mortgage payments, which resulted to a growing number of mortgage defaults.
For the first quarter of this year, foreclosure filings hit record levels and delinquency rate has doubled. And to add insult to injury, the worst part may not be over since many adjustable rate mortgages are posed to re-set this year.
National housing inventory level has also risen to new records – over ten months worth of properties that are yet to be sold. According to the Census Bureau, there are over 2.9 million vacant homes for sale in the market today.
Such market conditions should be considered as golden opportunities by buyers especially with the many available foreclosed properties for sale. If you are in the market for a foreclosure property, check out the hot deals offered by Foreclosed Properties Data.
