Thursday, December 6, 2007

Demand For Short Sales & Foreclosures Seem To Be On The Rise

I've been spending a lot of time lately with buyers, which always gives me a great perspective on the market. Because of the nature of the current market, many of the homes that we are looking at are either Short Sales or Foreclosures. Over the past couple of weeks, I have run into several different properties that when I call to confirm availability, am told that they have multiple offers on the home that the bank is in the process of reviewing. One of the properties even had an offer that was higher than the list price. I almost fell off of my chair when I heard that. It's been at least a year and a half since the last time I saw a property with an offer for more than what they were asking. Now, this home was slightly under priced from my point of view, but not by more than $10K - $15K. But from what I've seen most buyers aren't even willing to be that close to the true value of the property when buying from a bank. Most are attempting to obtain the home for something like $25K - $50K below market, at least in the price range that we were dealing with.

Does this mean that the market's on its way back? We won't know for a little while, but it sure is nice to see the increase in demand. Does it mean that the frenzied times of '04 & '05 with multiple offers on every property are on the horizon? I don't think I'll be going out on too much of a limb here when I say, "NO!". However, my hope is that these foreclosed properties don't linger on the market for an extended period of time. I've got a couple of listing where we simply can't compete on price with the 4 or 5 foreclosure properties in their subdivision. Of course, when they sell for substantially less than what we perceive to be the market value, it will only drive the actual market value down, but once they're gone, inventory levels will hopefully begin to decrease for a change, and buyers won't have the seemingly endless number of foreclosed properties to choose from any longer. So as long as sellers are able to hold tight on their price to some degree, prices will begin to rebound a bit.

Until the next time I run into something that throws me out of my chair, Happy House Hunting!

-Steve Nicks

[tags] foreclosures, short sales, Desert Ridge real estate, real estate buyers [/tags]