Foreclosure Auctions Could Help To Fix Housing Problems
Karl Case – the co-founder – of a home price index has said that more auctions of foreclosed properties are working to remove the inventory from the housing market and could lead to a fast recovery. “I think we’re going to see some signs of life in the next few months,” Case, an economics professor at Wellesley College in Wellesley, Massachusetts, said in an interview with Bloomberg Radio. “The market is beginning to clear somewhat. There is some good news in this.”
Home prices in 20 U.S. metropolitan areas fell in March from a year earlier by 14.4 percent, the most on record, according to the S&P/Case-Shiller home-price index released today. The year-on-year gauge has fallen every month since January 2007, as the U.S. housing market undergoes its worst slump in a quarter century.
Case said the quickening pace of home-price declines reflected mounting auction sales along with traditional transactions. “Banks don’t wait around,” he said. “They put it on the market and get rid of it. That means prices adjust more rapidly.”
The slide in prices may already be contributing to a recovery in demand in some areas. Sales in the San Francisco region jumped 29 percent in April from the previous month, the biggest March-to-April gain in at least 20 years, according to DataQuick Information Systems in San Diego. The median price was $518,000, down 22 percent from the $655,000 peak in June and July 2007, the real estate data company said.