Already dirt cheap, foreclosure prices dive
You know things have gotten bad when banks slash prices on foreclosure specials.
The average discount on foreclosed homes across the country hit 32 percent in the third quarter, up big time from 26 percent in the second quarter and 29 percent a year earlier, RealtyTrac reports.
Meanwhile, sales of distressed properties plunged 25 percent over the summer, a decline driven by the expiration of the home buyer tax credit and to some extent the robo-signing controversy.
So what does this mean for home buyers in a still relatively pricey state like Massachusetts?
Well short of moving into the hinterlands well beyond I-495, foreclosures still represent the best deal around.
Distressed properties accounted for just over a third of all home sales activity in the state from July through September, RealtyTrac reports.
Bay State homes in some stage of the foreclosure process fetched an average price of $181,088 in the third quarter, or a 25 percent discount from non-distressed sales.
Given lots of folks commute in from New Hampshire, let's throw those prices in as well.
The average Granite State foreclosure sold for $166,129 in the third quarter, or a 34 percent discount, according to RealtyTrac. (Still, there are a lot fewer foreclosure specials to be found across our northern border, with distressed properties accounting for just 7 percent of all sales in New Hampshire.)
And if anything, these two trends in foreclosure sales, falling prices and falling sales, are likely to intensify over the coming months.
The fourth quarter numbers, due out early next year, will show the full-impact of the robo-signing crisis, which forced the nation's major banks to pretty much halt foreclosure sales for a couple months.
As financial institutions work through their foreclosure documentation woes, we are likely to see a sudden surge in distressed homes hitting the market, putting further downward pressure on prices.
Happy foreclosure hunting!
