Friday, January 27, 2012

Good news in Mecklenburg County housing data?

There may be a glimmer of good news for Mecklenburg County hidden within the recent batch of housing data released this week by RealtyTrac.

The research firm reported that the percent of U.S. home sales involving foreclosures continues to shrink as banks delay putting homes on the market and the total number of home sales falls.

Foreclosures accounted for 20 percent of U.S. home sales in the third quarter last year, RealtyTrac reported. That's four times higher than at the housing market's peak, when foreclosures made up less than 5 percent of sales. Two years ago, foreclosures accounted for 37 percent of U.S. home sales.

in North Carolina, foreclosures accounted for nearly 9 percent of sales between July and September last year, a 30 percent drop from a year ago.
Foreclosure sales include homes purchased after they received a note of default or were repossessed by lenders.

But dive into the numbers and there's an interesting trend: In Mecklenburg County, the number of sales of homes in pre-foreclosure accounted for more than 4 percent of total sales, more than double the state average of 2 percent. Pre-foreclosures involve homes that are distressed but not yet owned by the lender.

The number of pre-foreclosure sales in Mecklenburg County jumped nearly 50 percent in the third quarter compared to the previous year.

What this means, says RealtyTrac's Daren Blomquist, is that lenders appear to be more willing to accept short sales, where a buyer purchases the home for less than is owed on the loan and the lender takes a loss.

To be sure, the market faces heavy challenges from the amount of distressed housing still out there. The statistics, for example, don't take into account the looming shadow inventory of distressed homes. Nationally, estimates suggest there could be anywhere from 1.5 million to more than 6 million homes whose owners are seriously delinquent, that are in the foreclosure pipeline, or are owned by lenders but not on the market. An Observer analysis found that for every home officially for sale in Mecklenburg County in October last year, there were at least two more poised to come on the market.

Still, "(the pre-foreclosure statistics) are a good sign for the long-term health of the market because it could help the area more quickly absorb the distressed properties," Blomquist said. "That lenders are more willing to accept short sales makes sense because the foreclosure process is increasingly messy."

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