Home Foreclosures Topping Home Sales

New York Times is reporting that in some parts of the country homes are going into foreclosure in larger numbers than homes being sold.

During January, it was reported this week by RealtyTrac, there were 153,745 initial foreclosure notices sent out in the United States. That dwarfed the 43,000 total sales of newly built single-family homes and amounted to nearly half the total sales figure, which includes sales of existing homes and condominiums.

In the West, however, the picture was much worse. There the number of sales was barely higher than the number of foreclosure notices. It appears that in the most heavily affected states the sales totals lagged behind the number of foreclosure notices.

Moreover, the volume of foreclosures is especially high in some states. In California, RealtyTrac reports, nearly a quarter-million properties were subject to some legal action related to foreclosure in 2007. Not all those foreclosures were completed, of course, either because the process dragged into this year or because the homeowner managed to sell the house or come up with money to make the missed payments. But those foreclosure moves affected 1.9 percent of the living units in the state — or 1 in 52 homes.

I am no economist or realtor but his trend can't be good for people trying to sell homes. The influx of foreclosed homes will end up putting pressure on home owners looking to sell. They will either take their home off the market or sell at a much lower price, which will perpetuate falling home values.


Source:
http://www.nytimes.com/2008/03/01/business/01charts.html?_r=1&oref=slogin