Distressed home sales drop on LI and across U.S.

Sales of distressed homes on Long Island fell in August from a year ago, a new report said, a development that could delay any housing recovery.

CoreLogic, which tracks mortgages and foreclosure-related sales, said there were 49 foreclosure sales and 31 short sales, in which lenders take less than owed. In August 2010 there were 70 foreclosure sales and 28 short sales.

Together, these distressed sales represented 3.2 percent of the August home sales here, down from 7 percent a year earlier, data show.

In its report, CoreLogic predicted darker times as it pointed to a nationwide drop in distressed sales and home ownership rates, along with an increase in bargain-hunting home investors.

As distressed-sales decline, foreclosed homes sit vacant longer in communities, the report said. That problem is exacerbated as more investors lose interest in foreclosure auctions and wait until the properties go on sales listings, leading to more losses for the banks and "abandonment issues" for communities, CoreLogic said.

At the same time, consumers of "prime home buying age" are less interested in owning, the report said. The national ownership rate among people ages 25 to 34 fell from 51.6 percent in 1980 to 42 percent last year, CoreLogic said. The rate for the 35- to 44-year-olds fell from 71.2 percent to 62.3 percent in the same period, CoreLogic said.

Ben Oliva, broker owner of Family Tree Realty in Mineola, said renters now want to trade up to a more expensive and bigger rental rather than buy. He said eight in every 10 callers he gets wants to rent, the opposite of two years ago when people wanted to own.

"They'd rather rent and wait and see what the economy is going to be like a year or more down the road, even though the rates are great and the prices are low," Oliva said.

"Because of the economic uncertainties, they want an upgrade, a bigger place, a more modern place, but they want to continue to rent."

He said he showed several apartments Wednesday to a young pharmacist, who was interested in one with granite kitchen countertops.