Today's sellers in many areas of the country are competing against those who have given up on the American Dream. That of owning their own home. It can be debated whether it was the fault of the homeowner in getting themselves into this situation or not (health issues, death of family member, divorce, financial straits, bankruptcy) or a group of unscrupulous lenders adding to the problem.
But in any event, this class of home is definite competition to both new home construction and "normal" pre-owned potential sales.
I checked in my backyard, for example (Denton County, TX) and heard anecdotal evidence of investors and buyers trolling for foreclosures. Some would say they looked at 80 to 100 homes and decide to make a bid or not. Sometimes the banks would get them other times the investor could get them. The number of foreclosed homes up for auction has been steadily increasing and my county is projected in 2008 to have the highest percentage increase in a 10-county area. Already in the past year the jump in homes posted was 17%. In 2007 for the entire region 43,000 homes were posted for foreclosure, a record, up 10% from 2006. The ratio of foreclosure postings is 1 out of every 580 housing units.
Looking nationally, analysts predict 2 million Americans could lose their homes to foreclosure during 2008 due mainly to adjusting sub prime mortgages with the recent Washington rescue plans not expected to help.
One thing to note if you are a buyer looking into foreclosures, short sales, or REOs. They ARE NOT always the best deals. Foreclosures are tricky to buy, sometimes without inspections and bags of cash brought to the courthouse steps. There can be equally as good a deals WITHOUT pursuing foreclosures with more safeguards.
A REALTOR that focuses on foreclosures can help the consumer sift through much of the conflicting information and subscribes to specialty services in this area.
This period of our rocky housing industry part of the economy will pass but be careful in assuming that everything that looks like a deal truly is one.
Comments(12)