The big supply of homes now for sale in the U.S. is driving home values down even more. Double dip, anyone?
Although some areas still boast fairly competitive REO (or bank-owned) sales – there is plenty of competition as buyers try to snatch ones in good condition for low, low prices – other areas have some ugly price drops going on.
But in some areas, the discounts were ever greater: In New York State, the discount for REOs was 53% during the first quarter. And it was nearly 50% in Illinois, Ohio, and Wisconsin.
Also weighing on market prices are “short sales,” homes where the selling price is less than what is owed by the borrowers. These sales sold at an average 9% discount.
Including both REOs and short sales, Ohio had the biggest discount of any state, at 41%.
Terrible news for sellers in those states.
New construction in my own area recognizes the overabundance of existing homes for sale. In my town, only three permits were pulled last month where in 2005 there were at least ten times that amount. The waiting for a housing recovery continues.
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