Once Upon a Time, Distressed Sales were 'Deals'

By
Real Estate Agent with RE/MAX Suburban
https://activerain.com/droplet/4Jgp

Across the Chicagoland real estate market, distressed sales namely foreclosures & short sales, are now making up less & less of closed transactions. Economists now tell us that they now make up the smallest market percentage, now falling to a 6 year low.  Illinois is currently at 1.8% statewide.

What does that mean for you and your Schaumburg Area Home? Prices are now stabilized Schaumburg Homeswith a majority of closings now being 'normal' transactions. There is such a small percentage of short sales now that it's hardly worth considering.

SUCH A DEAL?

REO's or foreclosures are still having an impact in the market share but in different ways. Long gone are the 'deals' that were able to be found even 1-2 years ago. Foreclosures are becoming a smaller & smaller market percentage but the way they are being introduced into the market has changed. Many foreclosures are being 'rehabbed' before being put on the market as buyers want to do less & less work. In fact, some first time home buyers might be incapable of knowing how to do that required work. The banks have figured this all out now and are installing new carpeting, flooring and fresh paint where needed. They are trying to wipe the 'blight' or stigma out of the property by presenting it in it's best light.

IT'S WORKING

Not a bad deal for buyers who don't know the working end of a hammer. Prices do not reflect the rock bottom condition that was offered in the past. With that work, comes an increased price & banks are quickly figuring out what the public wants. Incentive programs like new stainless appliances are not uncommon in foreclosures as a buyer enticement. Standard 'refreshment' features are new carpeting & neutral paint.  

HIGHER PRICES DON'T CHANGE THE FEAR

Let's face it, buyers are easily scared off from foreclosures no matter what the condition. The main concern being they are sold in 'as is' condition. 'Take it or leave it' becomes a little scarier with a big-ticket home purchase. The buyer must still do their due diligence & have a thorough home inspection but many buyers are still scared of that 'unknown' factor that is not there with a regular seller.  I have to admit that it's sometimes hard for a buyer to try to work through the 'what happened here' curiosity.

 

schaumburg foreclosures

Sales of distressed homes fall to a 6 year low - Crain's
Foreclosures Down to 2007 Levels - Foreclosures by State - DSNews & Corelogic

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lyn sims remax suburban  Lyn Sims    Schaumburg IL Area    Northwest Chicago Suburbs  ●  (847)230-7324
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Rainmaker
1,437,515
Kat Palmiotti
406-270-3667 (MT), 914-419-0270 (NY), Broker in NY with Grand Lux Realty and in MT with (coming soon!) - Kalispell, MT
The House Kat

Those are interesting statistics.  In my area, distressed properties made up 4.76% of August sales but 18.3% of all currently active listings are distressed.  Yikes!

Sep 16, 2015 01:33 AM #1
Rainmaker
1,535,036
Lyn Sims
RE/MAX Suburban - Schaumburg, IL
Schaumburg IL Real Estate

Kat:  Seems like your market hasn't rebounded as quickly as ours. This is also just for one particular town of Schaumburg.

Sep 16, 2015 02:39 AM #2
Rainmaker
528,588
David Gibson CNE, 719-304-4684 ~ Colorado Springs Relocation
Colorado Real Estate Advisers LLC - Colorado Springs, CO
Relocation, Luxury & Lifestyle residential

Lyn,

 

In many cases distressed house were on the market before they became distressed and there was a reason they didn’t sell then. Floor plan, location, functionality, etc. These houses are rarely deals and buyers need to be very careful to do a complete assessment before buying one.

Sep 16, 2015 04:51 AM #3
Rainmaker
1,560,731
Carla Muss-Jacobs, RETIRED
RETIRED / State License is Inactive - Portland, OR

Distressed homes used to be a huge percentage of the market after the bubble burst.  But, I can see another bubble being blown up in my market and it's troubling.   Nice post and graphics!!

Sep 16, 2015 07:52 AM #4
Rainmaker
1,537,880
Marte Cliff
Marte Cliff Copywriting - Priest River, ID
Your real estate writer

Back when I was a broker I handled the (very few) Fannie Mae listings in our area, and they always did rehab. Houses were cleaned, re-painted, and new flooring was installed if the old was absent or in terrible shape. Once we even had to drill a new well - and then have the septic repaired after the well-driller ignored my map and drove right into the old tank. 

Even though Fannie Mae always listed first above market value, price reductions were frequent and the presence of a "repo" house in our market had a dampening affect on all the other homes for sale. We were all glad when they were gone. 

 

Sep 16, 2015 08:58 AM #5
Rainmaker
3,982,614
William Feela
WHISPERING PINES REALTY - North Branch, MN
Realtor, Whispering Pines Realty 651-674-5999 No.

Not many deals now days in my area...Better kow what you are doing.

Sep 16, 2015 02:36 PM #6
Rainmaker
3,278,450
Wayne Martin
Wayne M Martin - Chicago, IL
Real Estate Broker - Retired

Lyn, the market is improving and the banks are becoming wiser. Enjoy your day!

Sep 16, 2015 09:20 PM #7
Rainmaker
1,535,036
Lyn Sims
RE/MAX Suburban - Schaumburg, IL
Schaumburg IL Real Estate

Carla:  What do you see happening that you're referring to a bubble? 

In my area, if the house doesn't sell in 90 days, it's pretty much not going to. Lots of price reductions near 10K at each time - that tells me the house was over priced to begin with.

Continued great selling Wayne.

Marte:  You were lucky. There are many banks that won't do any repairs/updates at all & then  they wonder why the house won't sell at market value.

Bill:  They are getting less & less with more people looking for them.

David:  That is so true. Wonder if it was the sellers looking for a free ride or the agent being inexperienced.

Sep 16, 2015 10:50 PM #8
Ambassador
2,861,987
Anna Banana Kruchten CRB, CRS 602-380-4886
Phoenix Property Shoppe - Phoenix, AZ
Arizona's Top Banana!

Lyn great article.  Our market has returned to normal and there are very free foreclosures or short sales anymore. You're right, banks have 'cleaned up' home before going on the market and buyers do go for them....but should always have an inspection.

Sep 17, 2015 01:08 AM #9
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Rainmaker
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Lyn Sims

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