Posts (RSS)More Bids for Homes in Foreclosure Listings
In several areas of California, Arizona,Washington, D.C. and the Twin Cities metro area, a rising number of first-time homebuyers have been bidding against investors in buying bargain-priced homes included in foreclosure homes listings.
The so-called bidding wars were common only during housing booms, but in areas where many renters have been enticed by lower home prices, lower mortgage rates and the tax credit incentives to buy their first homes, they have been competing with real estate investors in bidding for bargain-priced but attractive homes listed in foreclosure listings.
In Sacramento, Prudential California Realty agent Cherie Hunt said her client competed against two investors to buy a three-bedroom house built in 2001. Hunt?s client won because she agreed to add $10,000 more to get to the winning price of $220,000, which is still much less than the $405,000 price of the house when it was bought in 2005.
In Santa Ana, southeast of the city of Los Angeles, Tamby Leonard said she has been looking and bidding for a home priced in the $300,000 range since January. She said good homes in foreclosure listings tend to be captured quickly by investors who have cash money. According to Altera Real Estate agent Ed Mixon, many first-time homebuyers are looking for houses in the $300,000 price range in Santa Ana.
Across the nation, home prices continue to drop as foreclosure listings get longer with added homes and as the lifting of foreclosure moratoriums show their effects on foreclosure listings.
Many housing markets, including New York City and South Florida, remain overloaded with bank owned foreclosure properties for sale.
This week, the Federal Housing Finance Agency announced that home prices across the country increased in February by 0.7 percent from January levels, but decreased by 6.5 percent from February 2008. The slight increase from January levels was largely due to increased sales from foreclosure listings in the West Coast.
Housing analysts expect housing markets in Washington, D.C. and California to recuperate faster than markets in areas overloaded with foreclosure listings, such as South Florida, which is battered with abandoned condos. Kenneth Rosen, head of the University of California?s Fisher Center for Real Estate, said New York?s housing market will take time to recover because of Wall Street?s collapse.
Housing analysts cite the affordability factor as one positive trend that arose from the foreclosure crisis. Nowadays, a family earning $52,800 can spend just one-fourth of the income for a home, a decrease from the 44 percent cut in the middle of 2006.