According to an article in the Dallas Morning News the sales and value of North Texas pre-owned homes continues to fall as much as 28 percent for single family homes and 31 percent for condos and townhouses. The massive amounts of foreclosures on the market is said to be contributing to the decline of sales and value of homes in North Texas.
The article said:
About 7 percent of homes listed for sale are foreclosure properties, Brown said. But they made up a much larger percentage of sales – about a third in February, in line with their level in January. Last year, one of four home sales through the Multiple Listing Service were foreclosures, he said. “What’s causing the average and median prices to decline is that we’ve seen an abnormally high share of sales from foreclosure,” he said. “Lenders are listing these properties very aggressively to sell them, and they’re selling quickly.”
This is one of the reasons we think the bankruptcy legislation allowing Mortgage Modifications in bankruptcy is essential to the health of our nation. The glut of foreclosures on the housing market is affecting homeowners who are current on their mortgage payments; but want to sell their home because of a job move, illness or the inability to continue to pay a mortgage in the future for whatever reason.
When buyers go looking for homes they are going to consider buying the foreclosure first because most likely it is cheaper with similar amenities. When you have large amounts of foreclosures on the market, even at 7 percent this can make selling a non-foreclosure home an almost Herculean feat. This dynamic will eventually push more people into foreclosure as they watch their home’s value decline below the amount of their mortgage.