Motivated sellers: Foreclosure sales feed ‘vicious cycle’

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Good piece of enterprise reporting tonight from The Associated Press: ‘A growing share of home sales comes from foreclosures, especially in states hardest hit by the housing bust, according to an analysis of data. In some parts of California lately, nearly half of home sales came from foreclosed houses.’

USA Today headlines the story, ‘Growing number of foreclosure sales feeds vicious cycle.’

More: ‘The growing proportion of foreclosure sales is both a symptom and a cause of worsening conditions in the weakest housing markets. Homeowners who aren’t on a deadline to sell are yanking their properties off the market. That means the remaining inventory is increasingly held by banks eager to unload foreclosed properties at fire-sale prices rather than carry the costs on their books.’

The AP’s foreclosure analysis -- focusing on the third quarter of 2007 -- found that, in California, foreclosure sales accounted for 11.3% of home sales in 2007, up from 3.7% in 2006.

Hat tip: Cal didn’t point out this story, but he has frequently pointed out the rising percentage of foreclosure sales in Southern California.
Photo credit: L.A. Times