32% of Cedar Home Sales Are House Foreclosures for Sale
The number of house foreclosures for sale in the city of Cedar in Utah that closed in 2009 accounted for around 32 percent of all home sales.
With short sales accounting for another 20 percent of overall home sales, distressed sales in Cedar City accounted for more than 50 percent of all home sales in the city last year.
The record number of short sales and foreclosures sales in the city pulled down home prices significantly, cutting down the median sales price of $176,000 in 2008 to $145,000 last year.
A typical house in the city, usually measuring 2,000 square feet and usually priced at $260,000 during the boom years, is now being sold off at only $150,000.
Additionally, many homeowners during the boom took out home equity loans, pushing their total mortgage loan amounts to unusually high levels in comparison to their incomes. Many of these homeowners now are staying in houses valued far below their total mortgage loan balances.
Some took out equity loans from their primary residences and invested in lower-priced second homes, making them pressured after the downturn to let their higher-priced first homes become house foreclosures for sale.
According to many real estate agents, the housing market will stay on as a buyer’s dream market in the next several years. This contention has forced older professionals to rethink and review their investments in real estate as their retirement years are approaching because they may not have enough money to spend during their retirement years.
Jennie Hendricks, founder of a Cedar City-based real estate firm, said that 2009 was a transition year for real estate agents, buyers and sellers. She added that agents need to adjust to changes in the property market, including acquiring expertise in short sales and foreclosure sales. Sellers and buyers meanwhile need to know how to adopt to new market practices and policies, including drastic changes in lending regulations.
Hendricks added that lenders are now learning from their huge losses from foreclosures and are now returning to the strict lending policies implemented decades ago. Banks now are again requiring new borrowers to put at least 20 percent down before approving their home loan applications.
For this year, veteran real estate professional Ronnie Vause is more optimistic about the housing market than most, saying that after most house foreclosures for sale are absorbed, the market will begin to get back to normalcy by the end of the second quarter.
