Absentee Buyers of VA Foreclosures increase San Francisco Home Sales

The Veteran Affairs Department takes possession of the properties defaulted by debtors who purchased residential properties with VA secured loans, after paying the mortgage lenders their balance in full. These VA foreclosure homes are considered best opportunities by investors since the discounts available on these foreclosed homes are considerable – from 10 to 50 percent normally.

In the 9 county SF Bay Area, during March it is reported that 32 percent of total home resales were made from foreclosure properties. Notably more than 24 percent of residential properties sold in Bay Area were bought through FHA loans. This figure is up by 2.3 percent when compared to March 2008.

Overall in the nation there is a visible upsurge in sales of government-owned properties such as HUD, Fannie Mae, and VA owned homes due to the fact that more number of home owners after buying their homes from government-backed mortgages defaulted. Again, more home buyers use federal loans to buy their homes.

In March this year, in the 9 county SF Bay Area about 7,000 homes were sold in all categories. This is 40 percent increase compared to February and increase by more than 10 percent from a year earlier.

This shows San Francisco Foreclosures attract buyers although the numbers of properties sold from the lower and middle-priced sector are on a decline and high-end properties are on the increase. Of the total home sales 17.5 percent were purchased by absentee-buyers, meaning they are not for personal use, but purchased as investment for rental income.

In comparison, the absentee buyer percentage was 19.4 percent in February; 18.3 percent same period last year; and the present percentage still above the average of 13 percent recorded over the last 10 years’ period.

Buyers making cash payment indicates that they don’t rely on financial assistance by loans and make these investments in VA foreclosures for profit motive, to snap up cheap properties when they are available. This is in spite of VA Department’s policy to give priority for owner-occupant buyers in bidding.

Another bit of encouraging news from Bay Area home sales is properties priced $500,000 and above –  in the high-end homes bracket – accounted for 35 percent of the total home sales during March.

Posted by Amitesh Kumar on May 17 2010. Filed under Foreclosures, Housing, Short Sales. You can follow any responses to this entry through the RSS 2.0. You can leave a response or trackback to this entry