For months, I have been advising investors to buy foreclosures in Natomas for a long-term investment. That's because the name of the game is cash flow, and prices are finally low enough to let these homes produce an income. Most of the bank-owned homes were built between 2001 and 2007, which means the electrical, mechanical and plumbing systems -- if they haven't been ripped out -- are newer, so the homes most likely will require less to maintain than an older home.
Today I showed an investor several homes. He kept saying to me, "There are so many homes on the market right now," but not the types of homes he wants to buy. We narrowed his choices to 16. Of those, 9 went into escrow over the past couple days. Here is a chart that shows the amount of REO inventory currently available as of July in Natomas, in the 95835 ZIP.
These are the number of foreclosed homes for sale. There is no freakin' inventory! We went from a high of 26.5 months, meaning it would take more than 26 months to sell every REO in May of 2007 down to .8 months in July, which is fewer than 30 days.
I included in our tour today one home in Westlake that was priced well. "What is THIS?" the investor asked.
"It's a regular sale offered by an owner occupant, a seller, who is not in default nor upside down," I explained.
"But what IS this?" the investor asked again, not understanding such foreign words.
It's an interesting market, my friends. :)
Graph: Trendgraphix
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