Repo Homes Blog

Lower-priced repo homes for sale helped drive the increase in house resales nationwide in March, based on figures released by the National Association of Realtors.

Sales of previously owned single-family homes, townhouses, condos and co-ops increased in March by 6.8 percent to an adjusted annual rate of 5.35 million housing units, compared to the adjusted rate of 5.01 million units in February. The number also marked a jump of more than 16 percent from the adjusted rate of 4.61 million units in March last year.

Many economists point to home purchases by first time home buyers taking advantage of the federal tax credits as a major driver in significant increases in houses sales nationwide over the past nine months.

They consider the tax credit program as a smashing success as it was able to preserve about $1 trillion worth of middle class residential units in the hands of buyers that purchased and occupied them. Analysts contended that without the federal tax incentives, a large portion of middle class housing would have been abandoned and left to deteriorate.

It was reported that first time home buyers purchased 44 percent of overall homes sales in March, a jump from 42 percent in February. Investors bought 19 percent of total house sales while the rest were purchased by repeat buyers.

Repo homes for sale and short sales accounted for 35 percent of total home sales in March, the same percentage of distressed sales in the previous month. The percentage of cash purchases also remained high at 27 percent, as the percentage of home sales to repeat buyers and investors accounted for a huge portion of total sales.

Despite the still high percentage of distressed sales, the sales price median for all types of pre-owned homes sold in March jumped up to $170,700, an increase of 0.4 percent from the median in March last year.

Economists are confident that the return of home buyer confidence and the stabilization of home prices will be able to offset the expiration of the federal tax credits.

The median price for single-family homes in 14 of 20 metro areas increased in March year-over-year, with double-digit increases in Boston, San Diego, Saint Louis and two other metro areas.

Among the four major regions of the U.S., the price impact of repo homes for sale was greatest in the West, where the sales price median dropped by almost 8 percent year-over-year to $209,400.

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Responsible flippers have been profiting from repossessed houses for sale in Naples, Florida by improving them before reselling.

These second generation flippers investing in foreclosures in Naples are different from the kind of flippers frequenting foreclosure auctions during the housing boom.

While flippers during the boom simply bought foreclosed properties and then resold them quickly at big profits without making repairs or improvements on the properties, many flippers now know they need to make repairs and significant improvements before they resell the properties.

While before, communities suffered from sharply reduced property values largely because of a glut of foreclosed properties abandoned by flippers when the housing sector collapsed, distressed communities now are being saved partly by flippers who are buying and restoring fixer uppers.

In Naples, many flippers are earning 10 to 12 percent of the amount they paid to acquire the properties. They have been buying and fixing homes in Naples, Naples Park, Golden Gate and Golden States.

One firm specializing in buying foreclosures in Naples has already flipped around 100 houses since January 2009. One of the repossessed houses for sale acquired by this foreclosure investment firm is a 2,724-square-foot 5-bedroom house bought for $150,000 at a public foreclosure auction. Just like many of the houses it has acquired and repaired, it expects to spend about $40,000 on the house before reselling it. With a planned resale price of $215,900, it can expect to gain about $25,900 from the house.

The more successful flippers are able to resell foreclosures they have repaired in about one month and a half. They use cash in buying foreclosures and in repairing these properties, so they are able to beat the competition.

Unlike before when flippers were looked upon as unscrupulous businesspeople, they are now looked upon as rescuers of blighted communities because they are usually the ones who have the cash to buy defective housing units and restore them to working conditions.

Real estate professionals now recognize the value of flippers who repair properties and prevent neighborhoods from being battered by low property values. Based on data from researchers with Florida Gulf Coast University, each foreclosed property cuts down the property of its neighboring property by 0.9 percent.

For instance, a property originally assessed at $300,000 would decrease in value by around $3,408 if its neighboring house is foreclosed and would decrease by around $17,040 if there are five foreclosures within one eighth of a mile of the property.

In Naples, flippers have been earning profits from repossessed houses for sale and at the same time helping neighborhoods solve the problem of blight caused by foreclosures.

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Repo homes for sale surged by a record rate nationwide in the first quarter this year, based on figures released by a real estate research company this week.

Mortgage lenders took back 257,944 residential units nationwide in the first quarter, a jump of 9 percent from total REOs in the final quarter of last year and a whopping jump of 35 percent from the first three months of 2009. REOs in the first quarter also accounted for 27.7 percent of the 932,234 foreclosures posted during the quarter.

The pace of foreclosure and repossession slowed down in many states, counties and cities in the first two months of the year, following the trend in January and February last year, but foreclosure activity resurged in March.

Total repossessions by lenders nationwide in March reached 91,568, nearly one-fourth of the 367,056 total foreclosure postings in the U.S. during the month.

In the first quarter, although Nevada was still the top-placer in foreclosure rate, the top-placer in number of REOs was California, with a total of 46,445 bank-repossessed units. The number accounted for 21.5 percent of the 216,263 foreclosures filed in California during the quarter.

In March, California also topped the chart of statewide REOs, with 16,892 units taken back by banks and counted in their books as repo homes for sale. The repossessions accounted for 18.13 percent of the 93,173 foreclosures filed in the state during the month.

The researchers contended that the sharp rise in REOs as a percentage of total foreclosure filings showed that mortgage lenders finally completed deferred foreclosure actions on a large number of distressed properties after these failed to qualify for permanent modifications or after other delaying factors were resolved.

They also explained that the pace of foreclosure in the first three months this year followed the trend in the first quarter last year – a slowdown in the first two months and then a resurge in the third month.

In addition to perennial top-placer California, the other states with the biggest number of REOs in the first three months were Florida, with more than 22,000; Arizona, with 21,442 REOs; and Michigan, with 16,604 bank owned units.

In March, the states next to California in REO numbers were again Florida, with 8,643 bank repossessed units; Arizona, with 6,869 units; and Michigan, with 5,715 units.

On a positive note, the surge in number of repo homes for sale nationwide could step up the reduction in the nationwide foreclosure inventory as the residential properties are ready for sale as opposed to distressed properties tied within the foreclosure process.

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House repossession is hitting even the richest people in the U.S. As a prime example, award-winning actor Nicolas Cage recently had his Tudor home in California repossessed. The estate also served as home to other celebrities in the past, including Dean Martin and Tom Jones.

As the percentage of Houston repo homes for sale dropped in February this year, home prices fell, based on sales figures from the Houston Association of Realtors.

Condos have been comprising a huge portion of Miami repo homes for sale as condo unit and building owners continue to default on their loans.

Labor unions have been carrying out various activities to help contain Los Angeles repo homes for sale. They have been gathering data on mortgage foreclosures, derivative securities and Wall Street bonuses to complete their armor as they fight the big banks they blame as the ones that largely caused the financial crisis.

A land bank in the Toledo area is expected to be created and to grow with houses repossession after Ohio legislators authorized the creation of a land banking scheme to acquire foreclosures and vacant properties in Lucas County for future resale, conversion or redevelopment.

The number of homes repossessed by lenders among tenant-occupied properties in Santa Cruz County, California has been rising, based on data from Santa Cruz Record.

Repossession houses are still increasing in number in Lafayette, Indiana due to a collusion of several factors such as unemployment.