Dear Friends-
I try to keep readers updated with the happenings in the local REO market, so in an attempt to be as current as possible, here's the latest news I have from good sources.
While many of us in the REO business thought that there would be a crush of properties entering the market in July, the previous information must not have been too good. Apparently because of the moratorium being stretched out, and the Pittsburgh market not being overrun with foreclosures like the rest of the country, over the past 3 months, the most active time in the real estate market, investors, and individuals have consumed the vast majority of the good deals that were out there. This is just the principle of supply and demand.
The level of frustration I am seeing with buyers on a daily basis is huge! Myself, I have written multiple offers over the past few weeks, and it is almost always a matter of going to a property that has been on the market for an extended period of time, only to find out when you bring the offer in, the listing agent says, "Bring your highest, and best, we're in a multiple offer situation." Not only has the competition begun to look like a battle between two old ladies in Filines Basement, the end result is properties in areas like Penn Hills, where three months ago, you could have found a $20,000 three bedroom, you now have to battle it out to get the property at 30k, and you can forget about picking something up in areas like Lawernceville for the 30k you may have been able to pay five months ago.
So what's the good news, and is there any at all? Yes, there is good news. Values in the Pittsburgh area will rise again because of this, but if only for a short while before they stabilize again. This calls to mid the question of when will these values stabilize, and this leads me to my next tid bit of information.
I happen to have it on, what I think to be pretty good authority that the supply of REO properties should be increasing in late summer, or early fall. Two of the asset managers I work closely with have informed me that they are looking forward to a busy fall, at the end of the moratorium.
So let's take a look at the logistics in this equation. The foreclosure inventory is going to peak again at the time of year that the buyer pool slims up. Therefore there will again be more supply, and less demand. This should make the buying process a little less stressful, and competitive. And the good news then will be that stabilization in pricing of the REO inventory, so don't feel compelled right now to grab just anything off the shelf because it's there, and you fear there will be nothing later. There will be more inventory to choose from in a month or two, and the deals on these properties will really be at their best at the end of the fall, leading into the winter.
If you are interested in purchasing REO/Foreclosure properties, give me a jingle, and I'll be glad to speak with you about a strategy for pursuing these deals.
Keep It Precious!
Chad
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