Buyers looking to purchase foreclosures should still have plenty of opportunities. Only 30% of bank-owned properties are listed on the multiple listing services, says Rick Sharga, senior vice president at foreclosure listing firm RealtyTrac. He figures banks still own as many as 500,000 properties that they want to sell but haven't put on the market.
A home many not be listed because the bank is wrestling with title, repair or owner right of redemption issues. (Several states such as Michigan and Wisconsin give the previous owners the chance to buy back a home that's been foreclosed on). Banks may also be holding houses off the market because selling them now would lower prices even further. Foreclosures typically sell at a 31% discount to similar homes whose owners aren’t in distress. Listing all those homes now, Sharga says, “would have a devastating impact on inventory and pricing." ...
“Foreclosures are the heart of the real estate crisis and the key to the recovery,” says Pete Flint, co-founder and CEO of Trulia. All home sellers have to compete with the bank-owned properties on the market. As a result, “homeowners are absolutely pricing to sell,” Flint says. “Nationally, one quarter of all homes have cut their listing price at lease once in the past year.”
Friday, May 22, 2009
RealtyTrac: 500,000 REOs being held off the market
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500,000? Two months ago, he said it was 700,000. Did it really fall that fast?
ReplyDeleteHow many are in DC?
ReplyDelete"How many are in DC?"
ReplyDeleteBeing that prices are astronomical, that our bubble kept going when everyone else was dropping, and that places like potomac just started getting foreclosures put on the market....I would bet a lot. However, thats just a guess.
"Being that prices are astronomical, that our bubble kept going when everyone else was dropping, and that places like potomac just started getting foreclosures put on the market....I would bet a lot."
ReplyDeleteEr - not exactly. Realtytrac indicates foreclosure rates in close in desirable places like Potomac, Arlington, etc. are very low. Something like 1 in 3000 homes goes into foreclosure. By contrast in places like PWC 1 in 100 go into foreclosure.
So how many are held of the market in DC? In places like hard hit PWC its likely a lot. In desirable places like Potomac? Very few...
"Er - not exactly. Realtytrac indicates foreclosure rates in close in desirable places like Potomac, Arlington, etc. are very low."
ReplyDeleteYeah they are low. I said they were just getting started, not an epidemic. There were 16 foreclosures on the market last I checked....comparing that to only 1 when I checked a few months ago, that's a massive growth.
Oh and that "close in desirable" nonsense is complete rubbish, being that there are neighborhoods in Rockville "closer in" than Potomac that have already went through massive foreclosures and dropped nearly 40% since the peak. Close in doesn't matter for those "desirable" neighborhoods.