Distressed property numbers hit new lows
Following the housing bust of the mid-2000s and the subsequent economic recession, many potential homebuyers put their dreams of owning their own property on hold. The fiscal decline hit many Americans hard. People felt they were unable to take a chance on the declining real estate market and instead continued to rent - despite the rising costs associated with that housing option.
A few years later, the tides are turning. Real estate in Sacramento is featuring positive gains, and the number of distressed properties on the market has declined. Real estate news and custom data provider DataQuick reports that three and a half years after peaking, the volume of properties entering the foreclosure process have decreased in the second quarter of 2012 to the lowest level reported since the housing bust.
Mortgage defaults are not only at their lowest rate since the first quarter of 2007, but only 49,026 Notices of Default (NoD) were recorded on residential properties in the second quarter of 2012 - down 10.2 percent from 54,615 for the first quarter of that year.
During the third quarter of 2011 there were 4,351 foreclosures, according to DataQuick. For the same time period one year later, the number of foreclosures declined 36.4 percent to 2,766.
The Sierra Sun Times reports that the combined share of distressed property sales decreased to 37 percent in September 2012 - down from 37.8 percent the previous month and 49.2 percent in September 2011. Distressed properties made up approximately 24.3 percent of those home sales this September.
Short sales, where a transaction occurs when the property sale price is less than what was owed on the mortgage, made up approximately 26 percent of the California resale activity in the third quarter of 2012, DataQuick claims.
"A foreclosure happens when a homeowner owes more on the property than the property's worth. Otherwise it could be sold and the mortgage paid off. So foreclosures go up when home values go down. Prices in most areas today are up significantly from their low point in early 2009," said John Walsh, DataQuick's president. "Additionally, during the past year, we've seen short sales overtake the foreclosure process as the procedure of choice to deal with homeowner distress."
A decrease in the number of distressed properties on the market will allow Sacramento's housing market to continue to steadily improve in the future.