Demand Rose for Orange County REO Property
The demand for low-priced REO property in Orange County, California rose last month. However, sales of foreclosures accounted for only 29 percent of the total home sales in the area, the lowest figures recorded in over a year.
Industry experts said that the rise in demand for discounted REO property could be attributed to the lack of supply of foreclosure houses due to banks’ delaying of proceedings to foreclose on delinquent loans.
According to market data, foreclosures accounted for 46 percent of the total home resales in the area in January. But since then, foreclosure sales has been dropping with last month’s sales posted as the lowest since April last year’s 27 percent share of foreclosures in home resales.
Industry experts pointed out fewer foreclosure homes on the market as the major reason for the lack of supply and low sales. So far, there are only 374 foreclosure properties in Orange County, representing 4.2 percent share of the total homes for sale on the market.
May data showed a drop in the ratio of foreclosures and loans. However, the same report noted the 6.3 percent rise in the ratio of loans three months behind in payments but have yet to receive notices of default. The May figures were higher from the 4.6 percent posted in April and 4 percent the previous year.
Meanwhile, some foreclosure specialist analysts said that their own inventory of REO property declined to as low as 200 properties from nearly 400 early this year.
Industry experts explained that banks and lenders are taking their time bringing foreclosures to the market because of various reasons. They said that a growing number of successful loan modifications have resulted to a reduction in the number of foreclosed houses for sale.
Additionally, investors and buyers are taking advantage of the $8,000 federal tax credit and discounted foreclosure homes at auctions, with some of them buying more than two properties in just one sale event. Industry experts said that homebuyers are encouraged by very low prices to buy properties to fix and sell for a profit.
They pointed out that banks were not in the habit of offering big discounts of as much as 60 percent but are doing it now to trim down the number of REO property on their inventory.
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