There have been several attempts here to bust up the media’s insistence that foreclosures cause prices to plunge. The servicers get appraisals and BPOs completed on every asset, and price them accordingly to achieve top dollar – they aren’t giving anything away.
The national statistics will probably reflect a downward trend. If so, it’ll be more due to the cheaper junk being sold, than the prime properties – the owners are trying harder to keep those.
Here’s an example:
Jim-You’ve captured my level of frustration in the tone of your voice quite well. Thank you.
Nice house. But it would be really hard to ever enjoy that backyard with all that noise and exhaust.
Jim, how much do think that the perception that REO’s are priced below retail is based on:
1) Comparison of retail REO’s vs. above retail OPT’s (that won’t sell at those prices)?
or
2) Distressed REO’s that sell “below retail” (if you aren’t taking condition into account)?
What do you mean “Uh oh!” We could hear the bloody Detroit River from the bloody front door! 🙂
You know when your a bubbleinfo.com addict when you download 36 minutes worth of my favorite videos…..haha. It’s nice to see the old ones from a couple years ago that are a little fuzzy.
It’s always funny though! Thanks Jim for making flying a little more entertaining.
….
And do you really think someone would pay $1.17 or whatever it was for “retail”? That seems pretty high to back to the “Detroit River” (love that term)!
I wonder what that will sell for…..it’ll be interesting.
Any activity up in Bonsall? I was up at our good family friend’s house a while back and I love it out there. Their place is 3,900 SqFt on 7 acres with full avocado and orange/lemon orchard….it’s really nice and compared to the coast, it was cheap. I forgot what they paid….but it was a while back in 1970 or so….they should have bought more land!
Also, that big Air Show is going on tomorrow down in Coronado & that’s why I’m flying down.
Anyone who has the time should check it out.
JtR- What happens with more REO’s entering the market? Lower prices because of supply & demand.
I know the slant of this blog is towards Buyers looking for opportunities in distressed sales but more REO’s are destructive.
What’s going on now, whether anyone here likes it or not, is working.
Add to that the SDUT article about affordability hitting 62% and that tells me that the market is oversold.
1.1M! Wow.
House looks very nice, definitely massively overdone based on the location. Such a shame, nice renovation and backyard, but the 5 feet to the I5 is a killer.
I think Jim is saying that the market can absorb many more REOs at CURRENT prices. The demand curve is very flat. There are many people willing to buy at prices in line with the comps.
Is the MLS ever going to crack down on people relisting their OPTs every three months?
3.Jim, how much do think that the perception that REO’s are priced below retail
Hamster,
I think both of your examples are accuarte for those who are paying attention. Sellers especially want to compare their OPT to other actives, and shrug off the ‘condition’ arguments.
But the primary reason is that it has always been assumed that foreclosures are bad comps. Many sellers still refuse to consider REO solds as comps, because they are assumed to be giveaways.
They are not given away.
It’s like trying convince somebody that the Clippers have a decent team this year….wait a minute, that might not be a good example today, after they broke the Cavs losing streak last night…
Lower prices because of supply & demand.
but more REO’s are destructive.
Here’s more evidence – Mozart is the biggest bull here among us, and he thinks more REOs would be destructive.
I could sell twice as many homes as I do if there were just more well-priced homes for sale. Bring on more REOs please!
But it is the silly season now, with every amateur agent listing homes at 10% to 20% too high, thinking that it’s the spring selling season, and they can always come down later.
Jim, the 895k 2003 price was with no landscaping and that house now has a pretty nice backyard. It is unfortunate that they built the house so close to the freeway but I think it shows just how in short supply land is in that area.
No amount of deduction would compensate for the din of I-5. Rental, perhaps? I may not have much, but floating in my pool after a long day all I hear is the occasional cricket.
I don’t know about being a Bull but I do have faith in the coastal market’s long term value, resilience and steady appreciation.
Talk to me about Temecula and other burbs and I sing a different song.