Distressed Urban Properties a good choice??

Many people are starting to look at distressed properties (foreclosures and REO) as a way to get around the escalating homes prices in the past four years. This is a true catch 22 in the urban market. Many of the distressed properties are due to investors who were looking to flip for a profit. I don't believe buying distressed property in the urban market makes sense since investors all flocked to the same developments and ultimately there will be multiple (sometimes at-least 50%) that are in trouble. This causes the "falling knife" scenario where you might feel your getting a good buy on a particular unit but the entire building still has allot of inventory and pricing pressure that may continue past your price point.

 Smaller projects are somewhat the exception with limited exposure and probably was under the 'radar' of the investor. Be concerned about the larger projects that started selling two years ago as they will have the most exposure. Ultimately this will all settle out and values will reflect a more stable market. Loft and high-rise projects in Tempe and Scottsdale are more exposed due to their overall visibility and luxury buyers which drove prices to ranges that are not sustainable. Phoenix loft and high-rise projects have done better since they are part of the overall plan for downtown's urbanization. Plus, they were priced more appropriately. Phoenix Urban Living is all about the right home for the right buyer and this scenario is how we do business.