Anyone finding that most of the homes for sale in their area are short-sales or foreclosures?

Asked by Jane Doe, San Diego, CA Mon Dec 10, 2007

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Harold Sharpe, Agent, Menifee, CA
Sat Aug 21, 2010
Hi Jane Doe,
Yes. In many areas especially in CA, AZ, NV, FL, many of the homes are either short sales or foreclosures.
Here is why. These are the areas that had dramatic double digit and in some places triple digit growth. Other areas had little growth and sustained.
While the market is volatile, it is a great place to live, a great place to have you home and a great place to have a home as an investment make you money IF you buy low and sell high. If you buy during the boom or the bubble you are making a mistake unless it is a "latteral move" meaning selling you home and buying a home same size price etc.

Harold Sharpe - Broker
So Cal Homes Realty
(951) 821-8211
California Department of Real Estate License # 01312992
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Mike Kelly A…, Agent, Santa Rosa, CA
Wed Dec 19, 2007
Jane, give John my best! Our foerclosures seem to be limited to production housing areas and certain zip codes. We have a heavily hispanic area where many, many sub-prime loans dominated the buying landscape 2-3 years ago. It's been a bloodbath there. Both areas are "Westside" areas with the most affordable price points and primarily first time homebuyer neighborhoods and investor activity.
The "Eastside" of our town seems to be less prone to the scores of foreclosures happening in those other areas though we have had a few in the higher price points $700,000+ which have seen "Short-Sale" issues. Those mega "Option-Arms" where they advertised you could buy a home for $1,000,000 with -0- down and payments based on some slick and sick 1.75% teaser rate!!
However the first bit of legislation will give way to more substantial bills which might delay the sub-prime asteriod's crater when it fully hits home. The latest decent bill pastsed Dec 14 and forgives, up to $2,000,000 and for 3 years, debt forgivness issues on primary residences.
The "Durbin" bill would have the greatest impact but would force the defaulting or troubled homeowner into Chapter 13 (wager earner's bankruptcy) and would give the bankruptcy judge the power not only to modify the loan terms but the AMOUNT of the loan! Kinda like doing a short sale to yourself!! There's going to be "pain" as the homeowner must seek Chapter 13 BK but the end result will be a homeowner who can stay put, not put another "Short-Sale" or "REO" into the mix and get his loan amount reduced to "Market value" and have the terms of the loan, payment, interest rate, changed to suit their work out budget.
This is huge as the "Equity" issue has always been at the heart of the issue. Now you've got protection from debt relief also. The Durbin bill might complete the parlay. The Democrats want to "win" this election and will be pulling out all the stops to help those families in need. The Republicans are using the old "pull'em up by the bootstraps" which was the first bill which might effect 8 families in the country!!
Don't forget, it was big Bill Clinton who brought us all the $500,000 tax free exception. Dole at the time only was going to "dole" out $300,000. Of course, we'll probably get our butts taxed off..,!
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Team Forss R…, Agent, Temecula, CA
Wed Dec 19, 2007
You are correct, at least in Temecula and Murrieta. During the past week, 21 homes sold in Temecula and Murrieta. Out of the 21 homes that sold (closed) 16 were bank owned or short sales! The remaining 5 homes were new builder sales and resales. In Temecula and Murrieta, we see the bank owned properties increase for 2008 and it will be a pretty difficult market for "regular" sellers. Banks must sell. They are not going to lease out their home or decide to "take it off the market". For example, the banks we represent lower the price every 30 days until it sells and they respond within 48 hours, typically the next day. Short sales can be great opportunities but they are very often time consuming and slow to respond. For short sales you must be patient.
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Patti Philli…, , Carlsbad, CA
Tue Dec 11, 2007
Jane Doe, I too am in San Diego, and yes, there are a good number of foreclosures and short sales. I agree with my colleagues below, in that we will see an increase in the number of short sales, unless Bush's plan that he revealed last week is implemented, and quickly. See my blog discussing that: I respectfully disagree with Christopher regarding avoiding auctions. All of them are not "bad." Our company is doing a new program where we are auctioning properties, but they are not short sale or foreclosure properties. They are simply clients who want to get their homes sold the quickest possible- and at true "market value". What is market value? The price that consumers are willing to pay when there is a competive market- which is what happens at auction where there are a good number of ready and willing buyers!

There are, of course, some great opportunities out there right now, and with what is happening with the interest rates this could be the best opportunity to buy!

Patti Phillips
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Reba Haas, Agent, Seattle, WA
Tue Dec 11, 2007
I'm not sure if you are limiting your answers to the SoCal area or not, but up in Seattle we are not seeing massive numbers of short-sales and foreclosures. That is not to say that there are none - in fact, my team has recently begun an investor group for purchasing pre-foreclosures - but those are still limited in nature versus the number of properties that are available on the regular MLS marketplace and that are not impacted specifically by a negative financial need to sell.
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Christopher…, Agent, Hemet, CA
Tue Dec 11, 2007
There are many short sales and "foreclosures" on the market. The new year will bring even more to the market in Southern California. Short sales will suffer greatly in the coming months as there is an increasing supply of "bank owned" or REO properties available and easily obtained without waiting for long periods for a lender response or for an agent inexperienced in the short sale market. In South West Riverside County, it would appear that more than 50% are short sales or REO property. Normal resale will all but disappear over the next few months in my opinion. A retail seller simply can not compete with REO property and the agents touting a 600k home listed at a "short sale" price of $150k simply infuriates and further confuses uneducated potential buyers that find they can not buy the home at any price.

Regardless, can be a great time to buy. Avoid almost all "Short Sales" or "Auctions" and find REO property and resales where an owner is not buried in debt and simply has to sell for whatever reason. Do your due diligence up front and stick to a plan. Dont have a plan? DONT MESS WITH REAL ESTATE!
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The Hagley G…, Agent, Pleasanton, CA
Mon Dec 10, 2007
There are certainly a lot on the market right now. There are also a lot of good deals out there that aren't short sdales or foreclosures. It's a great time to by - good luck!
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