Falling homes prices and interest rates aren’t driving the sales any higher. While there are several thousands of foreclosure homes for sale as well as sellers wanting to get rid of additional houses, there are only few buyers. This is despite the fact that residential realty prices have fallen drastically and are currently the lowest in the last five year.
If you are planning to acquire a new home then it, would make economic sense to buy a property in anyone of the above 10 cities mentioned. According to a recent study (see table below), Indianapolis is the most affordable city in the U.S. while New York City is the least affordable. With a population of more than 1.7 million, Indianapolis grabbed the top position for being the most affordable of all cities in the US for buyers interested in residential real estate for the 14th quarter in a row! With an affordability of 93%, more homes are being sold within the median family household income than anywhere in the country. But that hasn’t lessened the brunt of the foreclosure epidemic. Over 20,000 homes or 3% of all the homes in the city were in various stages of foreclosure in 2008, putting the city on the 26th position on the nation’s foreclosure chart. On the same basis, NY is the least affordable city and only 13.9% residential properties met the above criteria.
Foreclosure homes are topping all listings and getting a good bargain is not hard anymore. Consider this, over 60% of all residential real estate sold during the last quarter of 2008 fell within the affordability circle. Simply said, if you were making an average of $61,500 or above annually, you would have paid only 28% or lower of that towards mortgage. Going by previous years’ records, the affordability factor for 2009 is well up from 56.1% in 2008 and 46.6% in 2007.
Foreclosed homes for sale, bank-owned properties, among others are all falling within the median family household income bracket. So also, the average rate of homes climbed down from $205,700 to $190,000 in 2008. This combined with the lower interest rates has contributed towards making home buying very affordable for the first time since its peak in 2002.
Unfortunately for the real estate industry, improved affordability hasn’t prompted people to buy homes. Lower consumer confidence, deep concern about the recession, and unpredictable employment market has been keeping homebuyers from grabbing this fantastic opportunity.
Currently, the problem being faced by the real estate industry is the lack of willingness to pick up a property. Industry experts and agents hope that with President Obama’s housing bailout plan, the rate of foreclosure will slow down and bring about stabilization in the residential real estate market and boost consumer confidence.
Perhaps that will also make people think that these good times won’t last forever! So if you are cash-rich and willing to make a purchase now, invest in foreclosure homes for sale and make a real killing and laugh all the way to the bank, by selling it off in the next 3-4 years!
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Written by Alex Rolim.
