The Foreclosure Market and the Best Cities to Buy Cheap Homes

Olivia Clifford  |

Thought the United States is past its peak when it comes to the foreclosures, there are still many markets nation wide that are weighed down by bank owned houses. When looking to buy a foreclosed home there are three major components when considering the best cities to buy in. The best markets are those that currently hold a large amount of foreclosed homes, have seen a recent increase in foreclosure and have deep discounts. The national average discount home in 2013 is being sold at 39 percent below the conventional sales price. The combination of these factors make these American markets prime for homebuyers looking for a great deal. 

In June alone there were 167,680 foreclosed properties nationwide, translating to around 20 percent of all American properties. That number was then added to the additional 544,247 bank-owned homes that were foreclosed on previously and still haven’t been sold. With so many American homes going through foreclosure there is an estimated 650,000 homes that are going to end up being sold in a short sale. This then provides those Americans looking to purchase homes with an opportunity to get a great deal. At the beginning of 2013, Florida had the most documented foreclosures with just over 30 percent as vacancy rates were proven to be higher on the lower end foreclosures of homes valued around $50,000.

Currently Cleveland, Ohio and Palm Bay, Florida are two cities displaying the biggest discounts on foreclosed homes. Within the last couple years Cleveland has seen a 141 percent increase in foreclosures and a documented 56 percent discount on purchase prices with the average home selling for around $57,782. Palm Bay, Florida demonstrates similar statistics. Though the discounts on homes in Palm Bay are not as seep as Cleveland, homes are being sold for a purchase price of around 28 percent below their value. Palm Bay has seen around a 309 percent increase in foreclosures that was directly linked to the closing of the Space Program. With around 8,000 people loosing their jobs in 2011. 

There are some risks and downside to those who decide to purchase homes that have been foreclosed on. Mortgage borrowers more often then not lack the finances involved with keeping up the maintenance on their house.  This then translates into there being many small problems such as plumbing problems along with insulation or minor issues. These homes also run the risk of being vandalized when left vacant for long periods of time as well as there are some people who purposely damage the property before vacating it. 

Overall, purchasing foreclosed home is one of the best options for those looking to purchase a home. With the continual increase in inventory combined with the shorter times to close and discounts, makes for a great deal. 





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