gabriel palo…, Real Estate Pro in Pompano Beach, FL

So how does the market for foreclosed properties in fact function?

Asked by gabriel palotas, Pompano Beach, FL Fri Feb 26, 2010

Despite the large increase in the number of foreclosures and REO properties and the potential impacts these properties can have on surrounding communities, surprisingly little academic research is available analyzing this market.

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Gerard Dunn’s answer
The market is suprisingly efficient.

The Office of Thrift Supervision places reserve requirements on banks. When a home is foreclosed - it is immediately "Marked to Market" by the lender. This may cause a necessary increase in reserve requirements for the bank.

Because of this - many banks are taking their time in foreclosing on homes. This is allowing the market to absorb the homes in a much more orderly fashion.

This also means that we will see foreclosures for a long time to come. There is a long waiting list of properties that have not yet come to market.
1 vote Thank Flag Link Fri Feb 26, 2010
What are you asking specifically?
0 votes Thank Flag Link Tue Mar 2, 2010
Hello Gabepal.

There is actually quite a bit of reaearch on the efects of foreclosures on a neighborhood. Try google and you will find several studies. The problem with real estate is it's very local by nature. I live in Coral Springs and the affect of foreclosures on different neighborhoods, condo versus singe family homes for example. Like I said earlier try google and you should find what your looking for.

Gary Benson
EcoBroker Certified
SFR (Shortsale and Foreclosure Resource)

Keyes Company

Direct: 561-445-2331
Web Reference:
0 votes Thank Flag Link Fri Feb 26, 2010…

For all others who are less knowledgeable than my friend Mark this is an interesting learning experience.
With many real estate is a hobby with some a science . The purpose of asking questions is to learn from different answers.
0 votes Thank Flag Link Fri Feb 26, 2010
Hi Gabriel,

The market for REO properties functions extremely efficiently. We don't need some silly academic research to tell us that. REOs typically go under contract in a matter of a few weeks and then close even more quickly than normal sales.

Good luck,
Mark LeMenager
Find your next house with the click of a mouse.
Search the MLS without obligation or registration from my website.
0 votes Thank Flag Link Fri Feb 26, 2010
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