Al Bunger, Home Seller in Colorado Springs, CO

Do the foreclosure sales and short sales unfairly bring the market averages down? What do the homes that are just normal home sales average? I

Asked by Al Bunger, Colorado Springs, CO Thu Feb 17, 2011

purchased my property in April of 2010 for $$181,000 - what can I hope to sell it for now? I do have it listed!

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Nationally, according to Realty Trac, short sales sell at an average of 19% below non short sales properties and bank owned homes sell at an average of 41% below. Of course, this discount includes the fact that these properties often need updating and repair. With 1 in 10 homeowners behind in their mortgage and 1 in 4 owing more on their mortgage than their home is worth, there has been and continues to be an increasing number of short sales and foreclosures coming into the market and competing with non foreclosure related homes that are for sale. Since it is pretty much a buyer’s market (in most locations throughout the country) buyers are looking for the “best deals”. The more short sales and foreclosures for sale in a market the more they will pull overall prices down.

As Chip Wagner of A. L. Wagner Appraisal Group, Inc, a third generation appraiser and an appraisal industry icon stated at a recent conference:

“If a specific market area has a low amount of distressed listings and comparable sales, it is likely there is little impact on property values, and we may be seeing appreciation taking place. A ‘low amount’ would be under 10% to 15%. In market areas where there is a high amount of distressed market competition, typically greater than 1/3 of the market, this distressed competition has to be analyzed as this is the new ‘norm’ for that market area. Buyers active in that area are looking at all of the competing properties and making their purchase offers and buying decisions based on all of the information available to them.”
0 votes Thank Flag Link Fri Mar 18, 2011
Any sale that's a lower-than-normal price will bring the value of homes around it down.
0 votes Thank Flag Link Fri Mar 18, 2011
Yes,
Fair or Unfair, the price of a short sale is a comperable sale. Bank owned and other distressed sales will also bring down the apraisal value. That being said the value of your home is based only on what a buyer will pay for your home in this market when compairing other simmilar homes.
So in short if you purchased in April '10 you are probably looking at a lower purchase value today than when you purchased.
If you would like to find out what your neighbors home sold for or what the home down the street is on the market for.
http://everythingprescott.com/sell-my-house/market-snapshot/
Trulia has some great market stats.
http://www.trulia.com/real_estate/Prescott_Valley-Arizona/ma…
If you need to sell for less than what you owe let us know.
http://everythingprescott.com/2010/11/short-sale-advic/

Thanks,
Brad
Web Reference: http://welcome2prescott.com
0 votes Thank Flag Link Mon Feb 28, 2011
Hi Bungeral,
Yes, they can if there are not any other comparable sales that the appraiser can use to justify the price of the subject property.Appraisers can take into consideration the condition of the home when they use the foreclosure as a comparable.With the current market conditions, the banks are being very conservative with lending thereby appraisers are also conservative. As far as what you can sell your house for will depend on the real estate market in your area. Bottom line is the market will determine the price of your home. The longer it is on the market, you will have to reduce the price of your home. Since your home is listed, you should talk with your realtor to see what homes have gone under contract in your area,. Your agent can also ask for feedback from other agents to see what other buyers are purchasing. This will give you an idea of why your home has not sold.Generally if you purchased a home in 2010, it is hard to make a profit however it is a case by case basis since we do not know whether you got a great deal on the house when you bought it. Good Luck with the sale of your home!
0 votes Thank Flag Link Thu Feb 17, 2011
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