The Downturn on Foreclosures
Posted by Stephen Cline on May 28th, 2011The foreclosure market, which was at an all time high in the last few years, is at an all time low right now. It’s not that people aren’t getting booted out of their homes, it’s that no one is buying these dead properties. As the real estate market slowly begins to turn itself around with the number of buyers increasing, there is a decrease in the amount of foreclosed homes that are being scooped up. This, of course, is due to a lot of economic factors.
The first is that the houses that are foreclosed are coming with an “as-is” warranty on them. Of course there are some structural things covered in the warranty, but there are few other things that will be paid for in the case of a breakdown. This is making the buyers very timid as far as what they are willing to spend their money on.
It doesn’t help that there are a considerable number of occupied homes on the market that are being maintained and sold at a fair market value. Someone will often be willing to pay slightly more for a house that has been maintained, then they will be willing to pay for a house that has not but is coming to them dirt cheap.
These issues are causing a lot of banks to panic. While they control the property, it has no value to them sitting there collecting dust. All this unused property is having a profound effect on the real estate market and it’s causes new developer to slow on building homes.
There is hope that with the economy in the upturn there will be a renewed interest in striking a deal, but there is no guarantee of that. It’s wait and see at best.
Tags: Foreclosure, Real estate, United States