Is it better to buy now or wait until the fall, after the summer season is over? Has there been a recent increase in foreclosures in Newport?

Asked by Kk, 02840 Wed Jul 7, 2010

My understanding is that there is a backlog in the banks on foreclosing on homes? Any idea if this is happening in Newport and what the impact might be on the market.

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Erin Diaz, B…, Agent, Hope Valley, RI
Mon Jul 19, 2010
Evening KK!
Unfortunately the foreclosures will be coming for some time... My advice would be to buy if you find what you are looking for. The market is creeping up and there is evidence of this (very minor) upswing in values and listing prices. I would say that with interest rates being where they are and you find what you are looking for you shouldn't pass up the opportunity.
Best of Luck!

Erin Diaz, Broker ~ Owner
0 votes
Jeremy Higgi…, Agent, East Millcreek, UT
Mon Jul 19, 2010
Kk,
There have been a number of answers to your question that mention a "shadow" inventory. My wife works for a loan servicing company in the short sale / REO department. The "shadow" inventory may well exist with some banks, however the slowdown in foreclosures has more to do with the new government programs than the banks holding onto property waiting for a better day to sell. If you visit http://www.makinghomeaffordable.gov you can read up on all the statistics of how many people are in these programs. The good part of the programs is that it is saving some homeowners from foreclosure. The bad part is that for a large portion of the people in these programs it merely kicks the can down the road.

In response to your question about waiting to buy, there are a lot of reasons to buy like low rates, new lower prices, but the reality is that there is more inventory on the market right now and more inventory means more choices. So you might get a better "deal" on a house in the winter, but it might not be the house you want. I would start looking now and if you find your dream home this summer I would buy it. Good luck.
0 votes
Pat & Steve…, Agent, Westlake, OH
Thu Jul 8, 2010
I suggest that you buy a home as soon as you can. The interest rates are, again, at all time lows. You will be able to buy "more home" for your money because of the low interest rates.
0 votes
Matt Heisler, Agent, Westborough, MA
Thu Jul 8, 2010
I have had several buyers ask me about the "pending foreclosure boom". Problem is, right now we aren't seeing evidence of it anywhere. The lack of inventory for nice homes that need little work is forcing buyers to be aggressive and pay more. Many things could change in the future, but if you find something you like, I'd grab it, because there are not many good opportunities out there for buyers.
0 votes
Amy Hoag, GRI…, Agent, Newport, RI
Thu Jul 8, 2010
Hi Kk,
Thanks for your questions. The foreclosures in Newport are actually dropping. We're seeing fewer auctions being advertised in the local paper and fewer foreclosed properties going on the market. While sellers may be more willing to negotiate in the fall and winter months after the summer season is over, there are other factors to consider. Interest rates are currently at historical lows giving you the buying power you may not have once they begin to increase, inventory is lower in the fall and winter months as many sellers take their homes off the market and new sellers wait until next season to sell if they can.
Web Reference:  http://www.AmyHoag.com
0 votes
Dan Chase, Home Buyer, Texas City, TX
Wed Jul 7, 2010
I expect lower prices by fall nationwide. The tax credit ending removed a lot of housing demand nationwide. May saw a 33% drop in new sales. Mortgage requests also fell off a cliff in May.

As mentioned, higher interest rates could (and sooner or later will) remove some buying power. If you buy to sell in a few years that will hurt your resale price. If you buy to live in forever it makes this a lot harder decision.

You may find that waiting 1-3 years is the best choice for lowest house prices. However, if massive inflation and a corresponding increase of wages arrives house prices could jump very high. If incomes stay low and interest rates go much higher house prices should drop.
0 votes
Christopher…, Agent, Providence, RI
Wed Jul 7, 2010
HI Kk,

Arthur hit it right on the head with his last line. If you are ready, willing, and able now is a great time. No one can accurately predict where the interest rates are headed in the coming months. All I can say with 100% certainty is that rates are at record keeping lows and home prices have stabilized.

As for REO properties, banks are still foreclosing on properties but for whatever the reason they are holding them and make up the "shadow"market that Arhtur is speaking of. My guess is that the banks are well aware of the horrendous effect that having them all on the market at one time would have on the economy, so they stagger their listings to accomodate this.

The REO properties will be here for a while to come. I would think even well after the eventual economic recovery.

Good Luck and Happy Hunting,
Chris
Web Reference:  http://www.cjcsellshomes.com
0 votes
Anna M Brocco, Agent, Williston Park, NY
Wed Jul 7, 2010
The best time to buy is when you need to buy and are ready to buy--do consider that today's interest rates are still very good and who knows where they will head tomorrow--also, keep in mind that not all foreclosures are such great bargains, therefore don't overlook traditional sales, as some may turn out to be a much better buy.
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The Bellevue…, Agent, Newport, RI
Wed Jul 7, 2010
Hard to say what the "shadow" inventory is in Newport. The postings of foreclosures has dropped significantly in the past few months and there are a lot of jobs coming to town, so I wouldn't think it would be wise to wait. Also, interest rates are SO attractive now that even if prices fell another 10%, you would be fine. 1% of interest rate on a mortgage is 10% borrowing power or increased costs.

If you are ready and able, don't wait.
0 votes
Erica Sousa, Agent, Newport, RI
Wed Jul 7, 2010
Hi
With house prices and interest rates still at an historical low, NOW is still a great time to buy. There are still a number of REO's currently on the market in the Newport County Area. If you would like further information please do not hesitate to contact me at any time.

Best
Erica
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