According to a report from the National Association of Realtors, the number of residential sales is starting to pick up after the worst year in more than a decade. But the momentum is coming from cash investors who are buying up steeply discounted foreclosures, not first-time home buyers who are important to a healthy market recovery.
The number of first-time buyers fell in January to the lowest percentage in nearly two years, while all cash deals have doubled and now account for one-third of sales nationally. The top five states in percentage of sales that were short sales or foreclosures in 2010 were Arizona, California, Florida, Michigan and Georgia. Alabama was in the middle of the pack.
The record number of foreclosures have depressed home prices in most markets. The median sales price for a home fell last month to its lowest level in nearly nine years, according to the Realtor‘s report.
But even with the rise in the number of sales, total volume remains far below the 6 million homes a year that industry experts say represents a normal pre recession market.
William Bruce is an Accredited Business Broker and Appraiser. He currently serves at president of the American Business Brokers Association. He may be reached at WilliamBruce@bellsouth.net or (251) 990-5910.