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Downward Spiral - how does it stop?

By
Real Estate Broker/Owner with Crown Key Realty, Inc; Tracy & Mountain House Sales and Property Management 01490605

Here is what I see in the Tracy and Mountain House, CA housing market.

We have 90% of the homes for sale in our market are distressed, either short sale or foreclosed homes.  In order to capture the buyers homes are coming on the market priced lower and lower every day.

Once the property is on the market, the home gets multiple offers and sells for over asking.

Then for the appraisal -- the home doesn't appraise, because everything else is priced lower.

Example:

Home Priced at $210,000

Price accepted  $221,000

Appraised at     $208,000 -- the bank sells the property for $208,000.

We are now in a situation when short sale clients are calling appraisers hoping for a property to appraise as low as possible, and REO properties not being able to appraise any higer than the list price.

So where does the spin stop?

Comments (2)

Roland Woodworth
Blue Cord Realty - Clarksville, TN
Blue Cord Realty

Susan... This is a very interesting situation here. Seems like each situation is different from the last. Makes it hard to figure out their thoughts

Oct 16, 2008 03:31 PM
Christina ONeal
At Home Real Estate Group - Ripon, CA
Realtor - Ripon California

crazy stuff here :)

Nov 24, 2008 06:08 PM