If those who insist in going by the real estate statistics would instead use foreclosures and short sales as an indicator, they would see that the market is not "back" as many would like for us to believe.
A big part of the problem is that the "real estate sales" statistics still fail to distinguish between distressed properties and what I call 'voluntary' listings. According to the latest CoreLogic report, the number of completed (and that does not even take into account those still in process) foreclosures since September 2008 is now at more than 4.2 MILLION.
As of January 2013, there were still 1.2 million U.S. homes in some stage of foreclosure, although that number is down by nearly 300,000 from early last year. The states with the lowest foreclosure inventory most recently included Wyoming, Alaska, North Dakota, Nebraska and Colorado.
My point is that it is no coincidence that the states with the lowest foreclosure inventory are nowhere to be found among the states with the biggest increases in home sales. By comparison, several markets in Florida (including Sarasota, as mentioned here a couple weeks back) are supposedly among the "most improved home sales" markets in the country.
However, as of January 2013 (still the most recent statistics available as of early March), Florida was reported to have had more than 95,000 homes in the foreclosure process.
What makes this problem even worse than misleading consumers with statistics that do not distinguish foreclosures and short sales, is that foreclosed homes more often sell as prices well under the true market value.
Thus, not only are these foreclosures damaging the truth about the real estate market, but they continue to bring down property values and kill a major incentive for "voluntary" listings.
Worse yet, not all of these foreclosure homes include short sales, even though those (short sales) create the same mess of lowering property values for those who have faithfully paid their mortgage and distorting the sales facts.
I'll say this again. More than 4.2 MILLION homes have gone through the foreclosure sale process since September 2008. As of the most recent report, there were more than 1.2 MILLION homes undergoing the foreclosure process, meaning that the majority remain to be sold at a reduced rate. And be counted as "regular" sales to make people think the market is better?
Let's compare to one other fact. Between 2000 and 2006, the average number of completed foreclosures per month in the U.S. was around 21,000.
If you take away the 4.2 million foreclosed homes sold in the past 4 1/2 years and removed the lower sales prices they fetched, you'd have a TRUE gauge of the current real estate market.
I'm on this topic for a reason. Last week I received an e-mail from a realty agent that I respect and have used in the past telling me that "Now is the time.....". Within five minutes, I was on Realtor.com to find not one but TWO homes on the same block and within the same development I live in that are for sale right now. Both prices are not only more than $30,000 more than I currently owe on my mortgage, but more than $150,000 LESS than the homes were sold for as recently as 2006.
As a marketing expert, I noted this to use as another example of how realty agents need to think and research before they send something like that out to "everyone". But as a home owner, I noted that these short sales (and foreclosures) not being 'separate' matters continue to damage my options.
Archidose, 1999–2024
8 months ago
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