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Report: Foreclosures driving home sales in some areas

March 18, 2010 - Although the number of homeowners falling into foreclosure has decreased in recent months, sales of bank-owned properties are still stimulating the real estate market in some regions, such as Phoenix.

Recent realty studies research from Arizona State University's W.P. Carey School of Business revealed that more than 3,300 homes entered foreclosure last month, which is down from 3,500 in January and 4,300 last February, the Phoenix Business Journal reports.

However, foreclosure sales and resale of previously foreclosed properties accounted for 65 percent of home sales last month, according to the study.

Jay Butler, an associate professor of real estate at the school, told the news source that homeowners who are "confronted with declining neighborhood values and restrictive debt amounts could decide to walk away from their homes," which could explain why foreclosures continue to drive the market.

Homeowners who are in danger of foreclosure may be able to prevent losing their homes by participating in government-funded initiatives, such as the Home Affordable Modification Program (HAMP) or the Home Affordable Foreclosure Alternatives (HAFA) program.

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