Here in California, its a jungle out there. Buyers have stopped waiting for houses to "GO LOWER". They are not wondering if buying real estate is a "good idea". And they sure aren't thinking about the potential for appreciation.
They have only one thing on their mind: Get in while you can. They are out in full force everywhere, hot on the trail of REO's, and operating at a fever pitch.
They are the economic scavengers in the real estate jungle....picking the bones of all those freshly killed mortgages.
Do I blame them? Of course not! It is the law of the jungle. We need scavengers so things won't go ROTTEN, you know. Just when they were convinced they would NEVER own real estate in California, along comes the mortgage crisis and they are salivating at the chance to feast on all those cheap houses.
Here is a twisted irony: Suddenly we are back to multiple offers. Buyers are bidding up the prices of REO's. Have we really come full circle leaving a giant swath of carnage in our wake? At what cost did we recycle that $500,000 house into the $295,000 REO (bringing buyers back into the market)?
Well, at least there are BUYERS again. I guess we should consider this some kind of consolation prize.
Some of you are probably wondering why, if the price was going to be $200,000+ cheaper, we didn't just let the original guy who paid $500,000 stay there?
Some of you are probably thinking about all those real estate owners. You know, the ones that have seen the value of their house sink to the "give away" prices of those lender owned properties.
And if, in all the frenzy to grab the cheap REO's, I am reminded of the guy who lost his house, will you forgive me? For every house that proudly displays a "LENDER OWNED" sign, let's not forget there was someone who lost his house to foreclosure, ruining his credit for years to come.
Now, I know these are the laws of the jungle. They call it the circle of life, right? And its all a part of the process to keep the eco(nomic) system in check. With all those dead mortgages lying everywhere, we should be very grateful that there are hungry buyers ready to devour what remains after the kill.
So I try not to think about all that has died in the name of balancing this out of whack eco system. But working and living in this jungle means I must pass by the carnage every day.
It isn't pretty, and I can't help but wonder if the tiger is still somewhere nearby, silently lurking.
Written by Janet Guilbault, Mortgage Lending Expert Based Out of the San Francisco Bay Area
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