With home prices at some of the highest levels in several years, some real estate observers believe housing is back from the low brought on by the most recent recession. However, financial experts say that the recovery is far from over, mainly because there's a considerable amount of foreclosures weighing down the marketplace.
But as a recent report suggests, foreclosures aren't nearly as common as they once were, illustrated by the infrequency in which they were purchased through the first three months of the year.
According to residential data supplier RealtyTrac and its most recent Foreclosure and Short Sales Report, there were about 22 percent fewer foreclosure sales in the first quarter of 2013 versus the same period last year. In addition, there were also fewer filings. About 190,100 residences were in some stage of foreclosure between January and March, 18 percent less than the final three months of 2012.
Daren Blomquist, vice president at RealtyTrac, indicated that the smaller amount of foreclosure-related sales were not unsurprising, seeing as how fewer people actually went through the foreclosure process in the year's first quarter, leaving a smaller amount of properties to choose from.
Foreclosures few and far between in Northeast
There were those states, though, that saw their fair share of foreclosure-related purchases. RealtyTrac reports that more than one-third of property sales in Georgia during the year's first quarter were foreclosure-related, while Illinois had the second-highest ratio at 32 percent. California, Arizona and Michigan rounded out the top five. Meanwhile, Northeastern states accounted for the fewest foreclosure sales as a percentage of all home purchases, specifically in Massachusetts, New York and New Jersey.
As for the prevalence of distressed property filings in specific metropolitan statistical areas, nearly 40 percent of all sales in Atlanta were foreclosures. In terms of population, that's the highest percentage of foreclosure-related sales in the country's largest 20 MSAs. Other cities wherein foreclosures comprised 25 percent or more of all residential sales included Chicago, Detroit, Los Angeles, Miami, Tampa and Phoenix.
Foreclosure activity limited in April as well
The downward trend of foreclosures appears to have continued in the first month of the second quarter. According to property information firm CoreLogic, there were about 52,000 completed foreclosures in the month of April, down 16 percent from the same period last year when there were 62,000.
Additionally, the report found, there are fewer foreclosures in the national housing inventory, totaling 1.1 million from 1.5 million at this time 12 months ago - a decline of 24 percent.
Mark Fleming, CoreLogic chief economist, noted that buyers will have a particularly difficult time finding a foreclosed property to purchase in the Southwest, along with a handful of other locations.
"Six states have year-over-year declines in the foreclosure inventory of more than 40 percent," said Fleming. "In Arizona and California, the year-over-year decline is more than 50 percent," said Fleming.
Conversely, the states with the highest number of completed foreclosures were Florida, Michigan, Texas and Georgia. In addition to parts of California, completed foreclosures in these states accounted for nearly 50 percent of how many there were in the country at large in April.
While foreclosed properties may be appealing to buy for prospective homeowners operating on a budget, these residences can have flaws in them that went unaddressed by the previous owners. Investing in a home inspection can account for these issues so that the appropriate corrective tasks are prioritized before a purchase.