The current year’s third quarter have yielded drop in home prices in for out of five cities in the U.S. This is explained by lots of low-cost foreclosures that flooded the market and the decline of the U.S. housing market.
The National Association of Realtors has said that out of 152 metropolitan areas, 120 have posted drops in median home sale prices, as compared to last year. It has expressed an 8 percent drop from that of the same quarter a year ago.
Foreclosure sales have made up about 40 percent of all the transactions in the third quarter, taking down the median price by 9 percent reaching $200,500.
Besides the decline of home prices, home sales have also declined. But four states have home buyers who have taken the bargain. These states are California, Nevada, Virginia, and Arizona.
As for the areas of Sacramento and Riverside in California, a huge portion of foreclosure sales have taken place in discounted prices since the home prices have dropped from 37 percent to39 percent. These two cities are recorded to have the greatest annual price drops.
What greatly affect the current situation of the housing market are the falling home prices, strict lending standards, and a tough economy. In fact, by the end of this year, RealtyTrac Inc. expects bank-owned properties to reach more than a million. This actually represents almost one third of all the properties for sale in the United States.
On the other hand, economists say that the economy have come into a recession, after more than two decades, and this could be the worst downturn to be experienced.
With the rising unemployment rates, worsening economic conditions, and tightening credits, the number of delinquent loans has increased.
With the continuing rise of foreclosures, the government has seen the need to use some of its funds from its $700 billion financial rescue programs.
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