The Birmingham Association of Realtors recently released sales data for the greater Birmingham market. Over the past 14 months the data indicates that foreclosure sales have held fairly stready with small variations, while traditional sales have varied quite a bit. The traditional sales were at a low in January then peaked around July and then started a decline to another low in February 2010. Because of the two variations in trends, the percent of foreclosure to total homes sales has varied as well. At the beginning and end of the period, foreclosures made up a larger percentage of the total, however in the middle, around July they were at the lowest.
The average sale price of a foreclosure for this 14 month period was $77,884 and the average sales price for a traditional sale was $213,423. You can see how such a difference can bring the average sale price of a home down. Traditional sales will have to maintain high levels and foreclosure sales will have to decrease in order for the average price to climb. What are your thoughts on this happening, considering the state of the economy?
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What a huge difference in prices of foreclosures and traditional sales. My market does not have such a big price gap but traditional sales do fluctuate quite a bit.
It surprised me too, the large difference. There has got to be a middle ground where the homes are not sold so cheaply because this is hurting traditional sales, and overall values.
That’s quite a difference between REO and traditional sales. Is there a big difference maybe between the quality of houses in the two camps? I wonder if traditional sales were more upper-end homes and REOs were located in inferior neighborhoods.
Ryan,
Since this data is for the entire Birmingham Metro area there is a wide range in the quality and location of homes. As always each individual area will be different. I pointed it out because it shows how the foreclosure properties can bring down averages. The median would be a better indicator here I guess since it is not influenced so much by highs and lows.
So You Think You Know What a Foreclosure Looks Like, Huh? | Birmingham Appraisal Blog // Jun 12, 2010 at 5:52 pm
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