Under $300,000 Foreclosed Homes for Sales in Maryland Soared

While sales of previously owned homes nationwide increased by 2.4 percent in May from April, sales of lower-priced foreclosed homes for sales and other pre-owned homes priced increased more significantly, although rates varied according to locations.

In Maryland, sales of homes priced below $300,000 soared by 41 percent in May.

On the other hand, sales of homes priced between $300,000 to $700,000 fell by 26 percent in May. For houses priced above $700,000, sales have been slow, prompting housing analysts to contend that it would take more than 3 years to sell all houses priced above $700,000 if current sales pace for this price level do not change.

Real estate analysts said that the factors for the increased sales pace for foreclosed homes for sales and other pre-owned homes priced below $300,000 include the $8,000 federal tax credit program which is expiring in November this year, the increase in number of first-time home buyers and the effects of the recession, including job losses.

Analysts say that more people now are daunted by large home loans, fearing they would not be able to afford higher-priced homes if the economy does not improve soon.

Many realtors have also been shifting their focus on lower-priced foreclosed homes for sales and other properties, saying they now prefer selling homes priced at $250,000 rather than waiting for a $1 million sale.

Real estate analysts also said that people who buy higher-priced homes typically make them their second homes, and these types of buyers have shied away from the market because of possible losses in the stock market or in their businesses. They said that houses listed at $2 million in 2007 are now listed at $1.2 million, but sales are still slow.

The other problem for houses priced above $700,000 is the lack of financing for higher-priced home loans and the higher mortgage rates for jumbo loans.

Typically also, banks require buyers of homes priced above $1.5 million to make down payments of at least 30 percent.

In San Diego, sales in the wealthiest areas in May fell by 8 percent compared to May last year while sales of foreclosed homes for sales and other properties in lower-income neighborhoods jumped by 37 percent.

Prices of foreclosed homes for sales in the lower-income areas fell by 30 percent while prices of existing homes in the wealthier areas fell by only 12 percent.