Why the surge in home sales is bad news

Posted on November 7, 2008 

Why the surge in home sales is bad news

At another time this would be welcomed as good news: Buyers are back! Except that it’s clear that this wave is driven by lenders trying to get anything they can get right now for the many thousands of houses they’ve foreclosed on, because as bad the housing market looks now, it’ll get even worse.

These numbers are so dire that they might sound like scare-mongering, except that if you look through the recent sales listings at any number of online sites, you won’t have to search very hard to find price drops right along the lines of these numbers.

This house in Riverside, Calif., for instance, was bought for $586,000 in 2006, foreclosed on in November 2007 and sold again this summer for $147,000 — just 25% of what it sold for two years ago. And here’s another heart-stopping fact: Even that vastly diminished sales price was financed, according to real estate records, with a 100% mortgage. Good luck getting one of those now.

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