Posted on 01/27/2009 10:20:26 AM PST by Golddigger3
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The trade group said 45% of transactions completed in December were "distress sales" by banks unloading foreclosed properties or homeowners selling for less money than they owe to lenders.
The December figure "is by no means a sustainable type of improvement," said Ivy Zelman, chief executive of research firm Zelman & Associates. She said the latest data represent a normal recovery from November's extremely weak performance and show that banks became more aggressive in selling foreclosed homes late last year.
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Even when prices do level off, he said, he doesn't expect a rapid recovery. For one thing, any sign of an improving market will cause an increase in supply as people who had given up on selling their homes rush to put them back on the market.
One key to the eventual recovery is how fast banks can sell their enormous holdings of foreclosed homes. SNIP Barclays forecasts that this inventory will peak at around 1.3 million homes in mid-2010.
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inventory in the Miami-Fort Lauderdale area at the end of 2008 was down 9% from a year earlier. But there are still enough homes on the market to last nearly 30 months at last year's sales rate. That is about five times the level considered healthy.
"Florida is still a train wreck," said Dr. Green of the Lusk Center. "It will be a long time before that market comes back."
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(Excerpt) Read more at wsj.com ...
We’ve been told time and again that the banks aren’t willing to negotiate their asking prices on foreclosures. We’ve looked at several, all in need of 10k or more in repairs.
That’s silly. Who told you that? Banks will take anything close to reasonable especially if it’s a cash offer to get the dead property off their books.
If you’re talking about “in general” versus your specific search for a home for yourself, there are number of things you can do to work things in your favor. Friend of mine just bot a 2400 sq ft home near the beach in Florida was: $1.2 MM, he paid $395K. This is like $140/sq ft, probably very near construction costs. Now...he had all cash, could close very fast, stated no financing contingencies, did his due dilly at great length, and on and on. He had to claw his way over 4 or 5 other buyers. Deals are available, you just have to get pretty aggressive with the bank to snag them, and thus you have to really like the particular property and develop a target of snagging it (without falling in love with it). Your approach can’t be a casual phone call “hey will you knock off $10K?, if so, I’ll check to see if I can get a mortgage and letcha know”.
In my town of 14,000, older homes that dropped prices by some 30% or more sold/sell.
Ironically, those buying seem to be local construction companies who upgrade them and then put them up for sale at 75% more than what they bought them for.
Many of them are setting empty or have gone to rentals.
Several homes have retained their selling price of last summer. They are still listed as ‘for sale’ on the realtor websites. They aren’t selling.
Also, rentals used to be on the market about a week. Now, some I’ve noticed have been on the market 2-3 months.
Most lenders when they foreclose set a price called net/net. Some also set a date, by which, if they don't sell they may go to auction.
Some of the listings agents for the bank know what the net/net is and others don't. You or your agent should do the best you can to find out what the other agent knows.
As always, if you're the only bid easy to lowball and come back higher for a "best and final offer" if need be.
If your have the time and patience, consider a short sale. In many areas, here, we have 5-1 short sales over foreclosures.
Please explain.
I agree there; what I have seen is cash offers flying in under the current listing price and being accepted, in contradiction to “banks aren’t willing to negotiate their asking prices on foreclosures.”
OK, if you take that literally he’s right; they don’t negotiate. You just throw an offer at them and they take it or don’t; there is no offer-counteroffer bargaining.
bump
Typically, the lender is slow to act. They have a mediator, a committee and who knows what else that the contract goes through. I have seen short sales go 3 months before approval. Last month, I got a call back on a short sale offer we made in August to see if our client was still. interested.
Some of our short sales too just 3 weeks for approval. Depends on the lender.
A home owner who can't make the payments any more and who is upside down, may consider a short sale because they could get another federally backed loan in 24 months. For foreclosures it may take 5-10 years.
Went to an auction Saturday. Most went for 1/3 third of what the sale price was 2-4 years ago (at the high level). Many were fixers, but some nice surprises.
Thanks. Do you suppose most Realtors know about these short sales and how to write them up?
They should by now. It’s been a big part of the market. If you have questions or have a scenario, freep mail me.
We just got our tax assessment yesterday. Down $90k since last year. $120k total below the price we paid for it.
If we bottomed out this year and go back to the normal 5% gain per year that the DC typically sees (as I’ve been told) it will take us another 7 years go get back right side up.
The worst part is we can’t take advantage of lower mortgage rates now because we don’t have equity in our house to get approved for a refinance.
Don’t forget the commercial RE balloons coming up.
http://blogs.wsj.com/deals/2008/11/04/the-great-commercial-real-estate-crash-mark-your-calendars/
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