Sales of homes have declined by 8 percent compared to sales during the previous year according to a survey done by the National Association of Realtors, thanks to foreclosures.
Over the year, 120 of 152 metropolitan areas which participated in a survey exhibited decline in prices of median home sales.
A huge 40 percent of the transactions have brought the median sales to $200, 500, about 9 percent decline from last the previous year. These values are seen as effects of foreclosures and sales of distressed properties.
According to president of the realtor’s group, definite huge scales of sales are those of discounted prices of distressed homes, those which are probably pre-foreclosed, sold at very low prices compared to prices during the previous year.
Two cities having the greatest price declines recorded in the annual report are Sacramento and Riverside, California. Sacramento declined to 37 percent while Riverside, California to an even greater decrease of 39 percent. It has been reported that not only are real estates in the verge of foreclosures sold in these areas, but also other properties that have been seized for debt.
However, home buyers in Nevada, some parts of California, Arizona and Virginia have reportedly invested on foreclosure homes posting a relatively stable and almost no fall in sales.
It is predicted that by the end of the year, over a million properties owned by the bank or about one-third of properties for sale in the U.S., will be in queue for market, according to RealtyTrac Inc.
Aside from the obvious foreclosures to blame, other seen factors that could further bring prices down the drain are the lending standards strictly imposed, depreciating home values and a challenging economy. Moreover, acceleration of layoffs could bring the declining pressure on prices to an even worse level than where it already is at present.
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Written by Alex Rolim.
