Though foreclosure activity in the U.S. is down significantly overall, those on the ultra high-end are bucking the trend.
Foreclosure activity on homes that are $5 million or more is up 61 percent so far in 2013 over the same period last year, compared to a 23 percent drop for properties overall, according to a new report from real estate database RealtyTrac. And while the number of actual $5 million-plus properties in foreclosure is low — fewer than 200 across the country — these homes represent a much bigger potential lending loss than those on median priced homes.
The trend, according to RealtyTrac, may be a sign that lenders are growing financially stable enough to weather the big losses represented by such high-end foreclosures. And a strengthening housing market brings more prospective buyers at every end of the spectrum.
“Any foreclosure properties in this type of ultra-luxury market usually get purchased very quickly since there is one thing all super rich buyers want — an outstanding deal on a real estate transaction,” Emmett Laffey, CEO of Laffey Fine Home International, said in a release from RealtyTrac. “In most cases, foreclosures of this magnitude come with several millions more dollars of built-in value.”
Florida and California accounted for more than 60 percent of all ultra high-end foreclosure activity in 2013 so far, while such foreclosures in the New York area, which in RealtyTrac’s report includes northern New Jersey, Long Island and parts of Pennsylvania, accounted for 29 percent overall. — Julie Strickland