Looking for a nice foreclosure deal? Good luck with that
The flood of foreclosed homes expected to come to market has not materialized. Instead, would-be buyers in many areas are finding desirable homes in short supply.
Are you waiting to buy a home until the foreclosure flood hits and you can have your pick of nice homes at a discount?
Good luck with that.
A new report from Pro Tech Valuation Services warns that the flood of desirable foreclosure properties once expected to come to market probably will never happen.
Would-be buyers in many communities have been struggling with the lack of inventory for months. Expecting to find a buyers market, they have found themselves instead struggling to compete with investors offering all cash for the few desirable properties offered for sale.
“With regard to the U.S. foreclosure inventory, there has been a misperception that it is a problem for the entire market. In fact, it is quite concentrated in specific cities and neighborhoods,” said Tom O’Grady, CEO of Pro Tech, said in a news release. “For this reason, potential buyers who have been waiting for bargain prices in desirable neighborhoods may be disappointed.”
As an example, Pro Tech looked at San Diego, hard-hit by the real-estate bust and the foreclosure crisis. Foreclosure inventory there is at its lowest level since 2008.
In fact, the number of homes available for sale in all three Southern California counties – San Diego, Orange and Los Angeles – will last only five months at the current level of sales, putting the market into sellers-market territory. Inventory is back to the level it was in 2005, at the market's peak.
Some areas of the country do have a high number of foreclosed homes for sale, but many of the cities hardest-hit by the real-estate crisis aren't among them. Many of the foreclosure properties available are in poor neighborhoods, in poor condition or both. While there is no doubt a "shadow inventory" of foreclosures that will someday come to market, it appears to be much smaller than once was feared.
The latest data from CoreLogic show that there were 57,000 completed foreclosures nationwide in August, down from 75,000 in August 2011 and 58,000 in July 2012.
The number of foreclosures filed in South Florida was up 36% in the third quarter of 2010, compared with the same quarter of 2011, according to Condo Vultures. But the 35,700 notices of default filed in South Florida so far this year are less than half the 75,500 filed in 2009.
Florida, unlike California, requires foreclosure actions to be processed through the courts, and the robo-signing controversy slowed the process in the state for a time.
"As the South Florida real-estate market increasingly shows signs of improving, lenders appear to be intensifying their efforts to work through the region's foreclosure mess," Peter Zalewski of Condo Vultures said in an analysis. "The unknown is whether lenders are filing foreclosure actions with the hopes of actually repossessing properties from borrowers in default or simply prompting action after years of inactivity due to a number of factors."
What do you think? How much shadow inventory is still lurking?
A Realtor here. The banks have chosen to hire foreclosure agents that don't give all the offers to the bank, and they sell them themselves, or under the table before they get to market - therefore running everyones price down. Why they don't just put them on auction and let the true market play out, and higher prices, I have no clue, other than Obama gave the banksters everything they wanted, and they certainly don't care about the general public. I would ask myself if you want this president in office another 4 years that sold us all to the banks for pennies on the dollar. Disgusting. Time to kick that bum out, and make our voices heard. Right now we are all just lambs going to the slaughter. Wake up people!
In addition, we have foreclosures and short sales in EVERY neighborhood in EVERY price range. We have $50,000 co-ops and $2million dollar mansions.
Just got hit with a judgement for the condo dues for someplace we have not lived in almost 4 years. Our name is still on the deed because the bank has not foreclosed and according to Washington law, we are responsible for the condo dues. So many of the empty homes you see may not be available because the bank chooses to have an overdue loan rather than property. Owning a home, the gift that keeps on giving.
people have been led to think they can get a 4-bedroom, 4-bath home in a nice area for $27.95.
We are closing almost entirely with cash from Argentina, Venezuela, Colombia, Uruguay and Chile. Rarely see a mortgage. They are investors who want to put their money in a safe haven, earn a nice return (rental), and make a nice profit overall. It is not unusual to see these condo's and houses resold within a year for 30 to 50% profits.
Actually the banks were able to collude and keep the number of available properties at a minimum, under the guise of "protecting the value of the neighbooring homeowners". They suggest that if they were to make all the empty forclosures available, it would drive down the value of the entire housing stock. Forgetting the fact that these same banks were part of the machine that artificially inflated the home values in the first place, and that there seems to be some violation of anit trust laws. These same banks are now artifically inflating the price of these forclosed properties, and hurting the value of existing homeowners when their neighboorhoods are 75% empty and abandoned. This then drives down the tax base, and municiple services disappear i.e. schools, police, and fire services. But the lenders money remains protected.
true story, my neighboor was forclosed on, and I had my real estate agent approach the bank about purchasing his property. (i live in a 1bd condo in las vegas, same as his). They claimed no property existed for sale. I inquired almost a year later, and it still was not for sale. But there it sits, right below me, inviting junkies to break in and ruin the place, endangering me and my home. But I cant buy it because the bank wont relase the property, because it would drive down their profit margin.
Is this not because this administration has the banks holding off on foreclosures until after the election.
About Teresa Mears
Teresa Mears is a veteran journalist who has been interested in houses since her father took her to tax auctions to carry the cash at age 10. A former editor of The Miami Herald's Home & Design section, she lives in South Florida where, in addition to writing about real estate, she publishes Miami on the Cheap to help her neighbors adjust to the loss of 60% of their property value.