By Daren Blomquist
 |
| Daren Blomquist |
RealtyTrac Vice President
Overall U.S. foreclosure
activity is down 23 percent year-to-date through October 2013, but foreclosure
activity on homes in the $5 million-plus value range is up 61 percent from the
same time period in 2012.
The number of these ultra
high-end properties with a foreclosure notice in 2013 is relatively miniscule —
fewer than 200 compared to 1.2 million total properties in all value ranges
with foreclosure notices this year — but each of these high-value homes
represents a much bigger potential loss for the foreclosing lender compared to
a median priced home.
This trend may indicate
lenders are now financially stable enough to more comfortably weather the
big-ticket losses that these properties potentially represent. In addition, an
improving housing market means more prospective buyers, even for these ultra
high-end homes. A bigger buyer pool translates into higher sales prices on
these properties, allowing lenders to recoup more of their losses on these
jumbo loans gone bad.
 |
| Emmett Laffey |
“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.”
The delayed rise in
foreclosure activity on these high-end properties may not all be instigated by
the lenders, however. Some of the homeowners may have had the means to hold out
against foreclosure longer than most homeowners.
Not surprisingly Florida and
California together accounted for more than 60 percent of all ultra high-end
foreclosure activity so far in 2013. In both states a combination of a severe
housing boom and bust over the past seven years along with a plethora of
high-value coastal property, have resulted in relatively high numbers of high-end
foreclosures — although high-end foreclosure activity in California was
actually down compared to a year ago.
Because a listing price is not
consistently available on properties in foreclosure, for the purposes of this
analysis, RealtyTrac categorized properties into value ranges using three
different data points available in its real estate database: estimated amount
of outstanding loans on home; estimated market value; and assessed value from
the tax assessor.
If any of these three amounts
was above $5 million, the property was included in the $5 million-plus
category.
For a complete copy of the company’s news release, please
contact:
PR
Manager
Office: 949.502.8300 ext
139
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