Every real estate market, no matter the time or place, is bound to be influenced in some way or another by "distressed" properties. In a "healthy" market, anywhere from 1-3% of the homes are generally distressed sales.
So what qualifies as a distressed sale? A distressed property will fit into at least one of these four categories:
- Property that is in poor condition
- Property that is or will soon be in the foreclosure process
- Property owned by someone who is experiencing financial problems
- Property on which the mortgage and lien amounts exceed the value of the property AND an owner must sell.
Well, if you've driven around the San Diego area, you will notice some neighborhoods with obscene amounts of homes for sale (i.e. it seems like every other home on the street has a "For Sale" sign in front), while other neighborhoods have been minimally affected by housing market.
I spoke with an agent from Seattle the other day, who informed me that there were a few short sales and foreclosures, but that those prices did not detract much from the "normal sales." Well, here in Chula Vista, the distressed properties comprise 90% or more of the properties on the market in Chula Vista!
This results in more poorly-maintained properties, more neighborhood eyesores, potential safety problems with vacant homes, disgruntled neighbors, an overall bad vibe in the area, the list could go on. Also important to mention, is the fact that condo associations could lose their ability to have VA and FHA loans written on purchases in their complexes, resulting in a downward spiral of decreased demand, increasing inventory and plummeting property values.
Another important point, is that homeowners who are not paying their mortgage, are probably not paying their property taxes either. This results in lower revenues for the municipalities in which the people reside, throwing off revenues received and creating problems with local, county and state budgets. This can affect everyone.
Despite egregiously high levels of taxpayer dollars, we have not yet seen a major shift in the way banks are handling the hundreds of thousands of impending foreclosure properties. Without a major change in protocol, it is likely that we will continue to see housing prices decline despite low inventories of homes and large numbers of buyers.
As a Certified Distressed Property Expert, I ensure that homeowners who are trying to short sale their property are successful. Foreclosure carries with it many unforeseen problems. The truth is, with the right representation, homeowners who have a legitimate reason for short selling their homes should be able to avoid foreclosure. This will help to keep our friends, our family and ourselves, happier and better able to cope with the other "issues" that life brings.
Wondering about the foreclosure levels in your neighborhood? Get up-to-date information on foreclosures and pre-foreclosures at http://www.foreclosureradar.com/flx.php?id=48ee5897d7070.