Average prices for damaged REO increased 6.3 percent in August from previous month

Average prices for damaged REO increased 6.3 percent in August from previous month

The Campbell/Inside Mortgage Finance Monthly Survey of Real Estate Market Conditions surveys more than 3,000 real estate agents nationwide each month. According to the latest survey, home sales in August decreased, but home prices remained steady despite the slow demand and rapid growing inventory as foreclosure filings increased last month.
The reports indicates that prices for all three categories of distressed properties – damaged REO, move-in ready REO and short sale – increased last month, while prices for non-distressed properties remained unchanged. Average prices for damaged REO increased 6.3 percent from July to August, prices for move-in ready REO increased 2.5 percent, and prices for short sales went up 3.8 percent. However, for non-distressed properties, the average prices showed a slight 0.9 percent decline. While the homebuyer tax credit was in effect, distressed property sales fell, but they picked up after the credit expired this April 30.
First-time homebuyer traffic fell from 32.5 in July to 29.3 in August, according to The Campbell index; this highest number registered for this index was 63.5 as recently as April. Furthermore, current homeowner traffic fell from 41.0 in July to 37.3 in August; this index was registered at 55.2 in April.
Thomas Popik, research director for Campbell Surveys said: “We're in transition, Individual homeowners listing non-distressed properties and mortgage servicers listing distressed properties are holding out for prices established before the end of the tax credit. Meanwhile, only a few homebuyers are willing to transact at these prices – and these are the transactions going into the averages. That's why we saw such declines in traffic and volume in today's market," he noted.
At the same time, Individual real estate agents who responded to the survey commented about hold-out sellers. "We are seeing that sellers of non-distressed properties who have their houses/condos priced fairly are strongly resisting low-ball offers even to the point of not countering. Informed buyers are recognizing quality deals and moving forward, the uninformed are looking for the deals that are touted on Good Morning America or the Today show," reported a real estate agent in Florida. "Our market has been remarkably stable over the last six months, with the exception of sales falling under the tax credit allowance…prices continued to stay stable or even rose," added an agent in California.
Furthermore, other comments from real estate agents seem to indicate that buyer interest is falling. "It's like we hit a brick wall. The market has almost come to a standstill. First part of the year was great and we actually saw a slight increase in home values. Now listings are reducing their prices – if we can even get an offer, it's a low offer," commented an agent in Indiana. "The phone stopped ringing after April 31, 2010. No one shows up to open houses," complained another agent in California.