The housing market is recovering, and the price of foreclosed homes is approaching traditional housing prices

The housing market is recovering, and the price of foreclosed homes is approaching traditional housing prices. New signs show that it is increasingly difficult for U.S. home buyers to take advantage of bargains on foreclosed homes. Foreclosures...

House market recovery, foreclosure prices approach traditional housing prices New signs show that it is increasingly difficult for U.S. home buyers to take advantage of bargains on foreclosures. The discounts on foreclosed homes are getting smaller and smaller, which means that the U.S. real estate market is slowly recovering. Nationally, the average discount on foreclosed homes in September was only about 8% below market value, according to an analysis by the website Zillow. This is a significant change from 2009, when the average price reduction was 24%. Florida real estate agents have seen the sales market pick up over the past six months, with many buyers bidding on homes. However, this does not mean that foreclosures have few transactions in certain markets. According to Zillow, the highest foreclosure discounts can be found in Pittsburgh, up to 27%. Cleveland, Cincinnati and Baltimore saw an average price reduction of 20%. But in many hard-hit markets, especially in areas where home prices have plummeted, foreclosure discounts have disappeared as investors and homebuyers swooped in to buy. Zillow also found no discernible difference between "foreclosure and illegal foreclosure sales," with discounts shrinking to less than 1% in Las Vegas and Phoenix. In Sacramento, Miami and Fort Lauderdale, the gap was just 3%, and in Los Angeles it was only 4%. Foreclosure discounts in the Washington area average 5.5%. In many parts of the country, foreclosure discounts have declined in part because foreclosure sales have shrunk, according to the analysis. Analysts believe that as the economy improves, fewer homeowners are delinquent on their mortgages. In addition, more and more banks have begun to turn to loss sales, modify lending policies and use other alternatives to avoid the expensive and time-consuming process of foreclosure. At the same time, foreclosure inventory remains low, allowing intense competition to drive up prices in many locations.