Sales of distressed and bank owned property accounted for some 24% of all US home sales in the second quarter, down from 31% in the first quarter, according to the latest data from Realty Trac.
Of this bank owned properties accounted for 15% of home sales in the second quarter, and properties in some stage of mortgage distress for 9% of sales. This is down from 19% and 12% respectively in the first quarter.
This shows that sales are dropping. But the number of properties sold after receiving a default or auction notice was up 5% from the previous quarter, although it was 20% lower than last year. This would seem to suggest that supply may be rising.
Discounts on distressed and repossessed US properties are also falling, which also suggests that supply may be rising. According to the Realty Trac data, the average discount on sales of properties in default or scheduled for auction was 13% in the second quarter, down from 16% in the first quarter, and 19% in the second quarter of last year.
The average discount on bank owned properties in the second quarter stayed at the running average of 31%.
While supply of distressed and repossessed US properties rising is bad news for the US housing market, because their heavily discounted sale prices are factored into future valuations of other houses in the area, it is not such bad news for the droves of investors from across America and around the world who are getting some seriously good deals on US property.
Azure Overseas are currently marketing the Village at Town Center, a development of luxury condos just a few minutes away from Orlando's main attractions. The price of just £47k for a 3 bedroom unit is evidence of the fantastic investment potential of discounted US properties. Think of the yield you could make renting that out on a PPPN basis.
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