The large number of foreclosures that have hit the housing industry in the U.S has opened a golden opportunity for first time home buyers. For the first time ever a record number of mid income families are opting for real estate investment through foreclosed homes for sale and are purchasing their own property instead of going for rentals.
The latest news reports on the real estate market trends across major U.S states have pointed out the highest rates of foreclosures in Texas, Chicago, Illinois and California. The percentage of foreclosures in these regions has been steadily rising at the rate of 3.5% per month. While home owners are having a tough time mediating with the lending agencies these foreclosed homes have a positive side to an otherwise dismal situation.
As these foreclosures are hitting the market constantly banks and mortgage companies are getting keener everyday to clear off their inventories. A direct result of this predicament is reflected in the highly reduced selling prices of these properties which are hovering around an average of 30-55% of their actual market worth. According to the last quarter survey carried out by CNN, the asking prices of two to three bedroom units in the South of Florida has gone down from last year’s $300,000 to last month’s average of $180,000.
While the prime reason of the popularity of foreclosures amongst first time home buyers are the highly affordable prices of these properties, buyers are also taking advantage of the various assistance programs that have been launched across all U.S state under the Nations Department of Housing and Urban Development. In view of the high rate of influx of foreclosures all over the country the U.S government has recently set aside a fund under the HOME program under which low and mid income family groups are being given financial support to purchase these properties at highly reduced asking prices.
One of the most popular housing incentives that have received a very positive response from first time home buyers is the tax credit abatement scheme. Successfully working in the regions such as Nevada and Illinois this scheme offers mid income families who are interested in purchasing a foreclosed home a considerable tax credit incentive based upon their annual earnings. The tax credit incentive more or less pays for the down payment of the property which has made the prospect of investing in foreclosures a highly attractive and profitable deal for modest budget buyers.
A survey carried out by the Economic Times in its quarterly issue has pointed out to a marked shift in the housing industry as buyers from modest income have changed the trend of real estate values in prime neighborhoods in the country. In Nevada alone, 75% of the properties that have been sold in the past three months have been reported as being foreclosures of which a whopping 82% have been picked up by first time home buyers.
On the whole while home owners are being overly cautious about their housing loans, foreclosures have resulted in a favorable opportunity for fist time home buyers who can now purchase a property which was otherwise out of their reach last year.
