Why foreclosed homes are appreciating faster than the typical home
"Markets will never overlook a deal"
Foreclosed home values are soaring.
Homes that were foreclosed on during the recession are appreciating at a faster rate than typical homes, MarketWatch reported. The median foreclosed home from that period rose 10.3 percent in value over the last year — compared with a 6.5 percent increase for the median home overall.
In some markets, foreclosed homes are reaching record values. The homes have climbed 74.5 percent in value since the recession, the report said. Meanwhile, the typical U.S. home increased 46 percent in value.
Still, the foreclosed homes are generally worth less. The median home value for foreclosed homes was $207,000, compared with $216,700 among all homes, the report said.
“When the housing market tripped up a decade ago, homes that went into foreclosure fell hard — their value dropping substantially more than homes that didn’t experience a foreclosure,” Zillow senior economist Aaron Terrazas said in the report. “But markets will never overlook a deal, and for much of the economic recovery, homes with a history of foreclosure have been a deal.”
The rate of investors flipping homes reached a six-year high in the first quarter of the year and the heightened flipping of properties in the aftermath of the 2008 recession has led to the rise of the iBuyer industry, as The Real Deal recently reported. [MarketWatch] — Meenal Vamburkar