Report shows how foreclosures impact price appreciation in country’s hottest housing markets
April 23, 2018, WALTHAM, Mass. —This month’s Pro Teck Valuation Services Home Value Forecast explores the impact foreclosures have on the nation’s top housing markets.
Traditionally, foreclosures as a percentage of market sales on a healthy market will be 3-5%, anything over 10% will have a marked effect on price appreciation.
As the hottest housing market in the U.S., according to Pro Teck’s Top Ten, Reno, NV boasts a foreclosure sales as a percent of market sales of .46%. Conversely, the 25th ranked housing market in the U.S., Columbus, OH, has a foreclosure rate of around 8.97%, much higher than Reno.
Foreclosures in both markets is having a marked, but different, effect on price appreciation in both markets — Columbus has seen a 8.57% yearly increase compared to 16.13% for Reno.
“Think of foreclosure sales as an anchor that can slow down the recovery of a market,” said Tom O’Grady, CEO of Pro Teck. “Because foreclosed properties sell for less, they can impact market sales if they become a large enough part of the housing inventory.”
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