Sound Real Estate information for the mid-peninsula of San Francisco: the Silicon Valley.
Wednesday, November 14, 2012
Are foreclosures good deals?
Are foreclosure sales good deals??
Favorable home prices and record-low interest rates combined with high demand and a severe shortage of available housing have created a highly competitive housing market in California, with nearly six in ten home sales receiving multiple offers, according to the CALIFORNIA ASSOCIATION OF REALTORS®’ (C.A.R.) “2012 Annual Housing Market Survey.”
More than half (57 percent) of home sales received multiple offers in 2012, the highest in at least the past 12 years, with each home receiving an average of 4.2 offers, up from 3.5 offers in 2011.
Lower priced homes – typically real estate-owned (REO) or short sales – attracted more multiple offers than equity sales ("normal sales"). Seven of 10 REO sales and short sales received multiple offers, while only half of equity sales received more than one offer.
It is my experience that REO's ( = foreclosure sales) and even short sales, in good areas with good schools, are not bought at a significant discount - if any at all. On the other hand, in areas which are less desirable, one can find interesting bargains. As always, where there is more risk, the price is more attractive.
For articles detailing better the draw-backs of such transactions, don't hesitate to send me a note. - yes, there are draw-backs to REO's and short sales.
Thanks for reading,