subject: Market Struggles With Glutted Foreclosed House For Sale [print this page] Home sellers in the Hampton Roads in Chesapeake, Virginia are having difficulty selling their properties due to the glut of foreclosed house for sale in the area. Despite the slight increase in home sales in the previous two months, local sellers find the market in dire need of buyers.
One couple had posted for sale their three-bedroom home last January for $379,000. Nine months passed and two reductions of prices later, the couple could not still find a buyer.
According to market data, 14,333 houses are placed on the market for sale as of September. Based on the current pace of home selling, it would take at least 10 months before the inventory of properties for sale could be cleared up. The inventory includes foreclosed house for sale which is pulling down home prices and values in the area.
According to economists, a balanced real estate market consists of a six-month supply of houses for sale. They said that the backlog is made worse by slow home sales in previous months. The backlog resulted to the drop of the average sales pace for 2009.
Meanwhile, the healthiest real estate sector in the region is the houses priced not more than $215,000, totaling 5,390 placed on the market for sale. The average home sales pace for this year showed that the sector has eight months supply of houses. Additionally, new homes in similar price range have more than seven months of home inventory.
Economists said that the higher the prices of homes, the more supply remains on the market. For the nine months of this year, 423 houses priced for as low as $510,000 and as high as $1 million were purchased. There are still 1,574 more houses on the market which economists estimated to take about 30 months to dispose.
On the other hand, the backlog of properties priced at $1 million and higher is almost five years. So far, 54 houses in this category were sold while 395 are still on the market.
Industry experts and economists said that one of the problems is the reluctance of homeowners to reduce their sale prices. In South Hamptons, the median home price was $225,000 in August, a drop of 2.6 percent compared with the previous year.
They expected the inventory of houses for sale to go up in the coming months as lenders and banks continue to place foreclosed house for sale on the market.
by: Joseph Smith
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