I got a call the other day from someone on my website. We all like those calls just knowing that our websites are out there working 24/7.
Simple request...Rich, can you send me all the listings in a zip code under 300K, 3 BR and 2BA. Oh yeah, no foreclosures or short sales. Alright, the last part made the request a bit harder but not impossible.
We're talking about a zip code where the yearly family income is approaching $100,000, not too shabby.
The first part of the search was real easy. Once I logged on, literally less than a minute. I found 48 properties that met his search criteria.
The second part of the search took a bit longer because I had to read each of the agent remarks. The key words I was looking for were foreclosure, short sale, third party approval. Out of 48 properties it didn't take that long but was I surprised by the results.
OF THE ORIGINAL 48 LISTINGS THAT MET HIS SEARCH CRITERIA, ONLY 8 WERE NOT FORECLOSURES, SHORT SALES OR BANK OWNED...WOW!
I knew that foreclosures and short sales have been creeping up lately but I never thought it was that high. It's one of those things that you see every day but never really look at.
WHEN THESE HOMES SELL THEY WILL BE DETERMINING THE FUTURE VALUE FOR THE NEIGHBORHOOD, AND IT'S NOT LOOKING GOOD!
Three to six months from now an appraiser will be looking back to now for the data necessary to perform their appraisal. I don't know about you but it's been my experience that foreclosures, short sales and bank owned properties tend to sell below the market value. Sometimes well below the market value.
The real estate pendulum has swung pretty far and it's going to take quite a while until it swings back. The number of sales will return much sooner than the value for home owners. It will remain a buyers market for a considerable time.
Rich Iarossi is a full time licensed REALTOR®, working in Crofton, MD. My coverage areas are: Anne Arundel, Prince George’s, Howard, Calvert, Queen Anne, and Baltimore City and County. I specialize in residential real estate, working with both buyers and sellers. Use the registration free search on my website at www.RichSellsHomes.com. If you’re not already working with a REALTOR®...I can help. Call me at 443-995-9595 (Cell) or 410-451-6255 (Office).
SKYPE ME: RichSellsHomes
Richard, We are all dealing with the foreclosure and short sale issues. I feel really sorry for people who are trying to sell in this market. Those REO's and Short Sales are hurting everyone, especially financially responsible people who are just trying to sell because they need too. Instead everyone is out there looking for that bargain and expect everyone who is selling to match those prices. Most of my sellers are very frustrated because they aren't even getting any showings. I'm afraid that isn't going to change until all those REO's and Short Sales are gone and that is probably going to take a long time. I've looked at a few of them. Most of them are trashed beyond belief. You may be able to buy them cheap but by the time you do all the repairs and clean them up they are going to be way over the values of everything else in the neighborhood. Great opportunity for those builders out there with nothing to do though. Only problem is those builders already have a lot of specs out there that they can't sell so they can't get any money to fix up these other properties. I heard last night that the Feds. have given Arizona State Government money to buy up the REO's and fix them up so they don't drag down the values in the neighborhoods. What next????
It's a tough pill to swallow, but once swalled we can be on the road to recovery. I'm trying to stay positive about 2009!
In some areas the short sale and REO properties are setting the price. It is going to take time for all those to flush out.
At one point the appraisers were able to weigh REO's differently than "regular" sales. Now in areas where the balance has shifted owners who don't need to sell need to stay put and ride it out. If they decide they need to go or have to go then they need to understand that they can not list their home for $200,000 more than the REO down the street. The reality of this market is what it is.
Sandra: I don't think banks have given up on going after the short sale people in the future for the difference. Builders are hurting right now even worse than resales.
Hope: We can only look forward. We'll leave the looking back to the appraisers.
Richard: That big flushing sound we hear is going to be home values.
Cindy: In some cases if the appraisers didn't have REO and foreclosures to look at there wouldn't be anything for them to use.
no doubt, doom and gloom.......all will have to adapt to this new environment.
Brad and Angela: I do think that we're at or near the low in values so I'm optimistic looking forward, even if it may take some time to see appreciation again.
I agree that this is a tough pill to swallow. Lots of foreclosures hurting home values all across the USA. Not pretty...and your in MD and I am right next door in Delaware.
Thanks
Tom Davis
World Class Delaware Realtor