Ultra high-end property foreclosures skyrocketed 61% in 2013
While foreclosures have been improving in America, the ultra high end sector has seen a dramatic spike in defaults, reiterating that housing is recovering but the ripples of the crash are still being felt.
(AGENT/GENIUS) – According to RealtyTrac, although overall foreclosure activity in America is down 23 percent year-to-date through October 2013, but foreclosure activity on homes $5 million and up has skyrocketed 61 percent from the same time period in 2012.
Admittedly, the number of ultra high-end properties that have received a foreclosure notice in 2013 is only 200 compared to the 1.2 million properties served with foreclosure papers this year, but RealtyTrac notes that each of these ultra luxury homes represents a much larger potential loss for the lender.
With a large number of ultra high-end properties, it is no surprise that Miami and California lead the pack, with Florida and California accounting for over half of the ultra luxury defaults.
RealtyTrac notes that aside from traditional causes, this report may actually speak more to the financial sectors’ stability and comfort with weathering big-ticket losses, as the buyer pool is improving once again, meaning the lenders are more confident they can recoup more of their losses on these jumbo loans that have defaulted.
“A home selling for $5 million or above represents the ultra-luxury end of the market, and so far in 2013 we’ve had 34 properties close over that price with the average sale being $7.7 million,” said Emmett Laffey, CEO of Laffey Fine Home International, covering the five boroughs of New York. “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, and in most cases foreclosures of this magnitude come with several million more dollars of built-in value.”
Advertisement. Scroll to continue reading.
In contrast, RealtyTrac notes that lenders may not be instigating the defaults, rather many of these homeowners may have had the means to hold out against foreclosures longer than the average homeowner.
While this sector accounts for a very small portion of the market, such a dramatic spike in foreclosures proves that despite being on the long road to recovery, housing isn’t immune to setbacks, especially on a granular level.
(Housing News) According to the NAHB, home buyer preferences vary according to their ethnicity; builders and agents can better serve clients by understanding their...
(Housing News) As qualifying for a mortgage remains difficult, new homes being purchased are increasingly large, with many more 4+ bedroom homes flying off...
(Housing News) Although not improving at a dramatic pace, home prices are inching up, rising 11.8 percent in November compared to the previous November.
Property Turkeysale
December 5, 2013 at 10:06 am
Also in Turkey, luxury foreclosure up %20 percent in 2013, hope in 2014 goes down.