If you've never visited a foreclosed home in person, you probably picture them with broken windows, tattered carpets, and random critters living in the attic. While those kinds of foreclosed homes certainly do exist (I've had to visit homes where the dogs stayed for a few days after the owners), there's also another side to the REO market.
Many of the highest-priced homes of the real estate boom have now become victims of their once-sky-high values. There are an increasing number of luxury and waterfront homes that have reverted to the bank. While some of these homes have a fair amount of deferred maintenance (Realtor-speak for damage and decay), there are some perfectly-maintained luxury homes whose owners simply walked away. Other luxury new construction developments have ceased to be profitable during the real estate downturn, and the bank that financed the project is now tasked with finishing the homes and selling them at whatever price they can get.
There are currently over 20 bank-owned homes on the NWMLS with list prices of over $1 million in King County. A handful of these homes are in Seattle, but a large number are scattered around greater Bellevue and the Eastside. While foreclosures aren't always priced at discounts, you'll find that many are priced more aggressively than a traditional homeowner's resale. Banks have an obligation to get these homes off their books at whatever price the market will bear. Many homeowners would rather wait it out.
Waterfront and Luxury Foreclosures in Greater Seattle
Currently, two Lake Washington waterfront homes in NE Seattle's Cedar Park neighborhood for sale at around $1.3 million. A luxury view home in Magnolia is listed just a bit higher. Large homes in Alki and West Seattle with panoramic Puget Sound views are coming just over $1 million.
Looking for a landmark address on the Eastside? A home in the city of Medina is listed just under $1.4 million. There are a gaggle of Bellevue and Newcastle homes from Cougar Mountain to Clyde Hill coming in under their assessed values in many cases. Yarrow Point tops out the current luxury foreclosure listings, with a pair of homes at $2.4 and $3.4 million.
With the current economy, the pool of buyers for luxury and waterfront real estate has certainly diminished somewhat. For those with the wherewithal and chutzpah to dive into the luxury market today, there are some real opportunities for big discounts on some very valuable real estate.
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