FORECLOSURE SALES - Will They Be The Pied Piper Leading Real Estate Recovery?
HALF OF ALL SALES TO FIRST-TIME BUYERS ARE PROPERTIES IN DISTRESS - NAR!
In the Chicago Real Estate Market today, there are still bidding wars! Dozens of properties in the city and Chicago Suburbs face multiple offers, and many sell for more than the asking price.
The difference between now and a couple of years ago, at the height of the Real Estate Boom? According to Mary Ellen Podmolik, in her Chicago Tribune story from May 17th, Many of these homes are in or near foreclosure. Properties either owned by the lender, or likely about to be.
And many of these distressed homes are sold to those buying a home for the very first time. These buyers have some, but not a lot of, saved cash, and none have the burden of a home that must sell first.
All of them are looking for a BARGAIN!
According to data from the National Association of Realtors, roughly half of all sales made in the First Quarter, 2009 were to first time home buyers, and half of those were properties in or very close to foreclosure.
The large number of foreclosure properties have pushed down home prices. Those purchasing them provide benefit for their neighborhood, as well as the local housing market. And they provide a vehicle for equity growth for a new generation of homeowners.
Many experts feel the Chicago Housing Market, and the U.S Housing Market in general, will not truly recover until the bulk of foreclosed, lower-priced houses are removed from the for-sale inventory. In IL, according to National Foreclosure Data Complier RealtyTrac, more than 7,300 homes were taken over by the bank during the First Quarter, 2009.
Recently, banks have become more aggressive in lowering prices of the foreclosed homes they own to get these homes off their books. At the same time, however, thousands of new foreclosures have flooded the market, as temporary foreclosure moratoria, initiated earlier this year, have been lifted or have expired.
Some lenders have been aggressively offering Loan Modification to many homeowners in danger of losing their property to foreclosure. However, many of these homeowners have lost their jobs in today's recessionary economy, and, for them, loan modification is of new use. Foreclosure is the only way out.
Buying foreclosures takes a certain patience, persistence, and vision. Many go in multiple bids, over the asking price, as ultra-low prices have brought out the bargain hunters. Buyers with the best financing, credit credentials, down payment, in addition to purchase price, get first dibs.
Also, most distressed properties are often heavy on deferred maintenance. Most show signs of neglect, others have serious water damage, missing or stripped major systems, mold issues, or, in some cases, squatters that must be rousted out.
Other distressed properties are in better shape, but nearly all are offered as-is, with no credits to the buyer for needed repairs.
But for the right buyer, with proper skills, attitude, and financing, these homes could offer opportunity. And their sale might actually provide a good, local real estate shot in the arm!
DEAN MOSS & DEAN'S TEAM CHICAGO
