Wednesday, July 9, 2008

Everybody's Buying a Foreclosure

I think I have had only 2 deals this year that did not involve some kind of foreclosure/short sale/distressed property.

My buyers are pretty good at recognizing a bargain and are willing to go through the agony of it all to end up with a good house.

Last night I was lying in bed thinking about how fewer "normal people" are listing their homes and more and more the selection for buyers is mostly bank-owned property.

I dug through a report put out by the Minneapolis Area Association of Realtors called Foreclosures and Short Sales in the Twin Cities Housing Market. A quote illustrating my point is here:
The market share picture is similar for home sales, with foreclosures and short sales comprising a larger portion of overall sales than they have before. In Q1 2008, 27.6 percent of total residential closed sales were mediated by a financial institution, up substantially from the first quarter of the two years prior. And the number of traditional closed sales fell from 8,896 in Q1 2006 to 4,790 in Q1 2008, while the number of bank mediated sales increased from 324 to 1,828 for the same time period comparison.
So we are talking almost ONE THIRD of all sales in Q1 2008 were foreclosures. That's not ending anytime soon, either.
Read the full report here:

I'm seeing lots of bank-owned and soon-to-be bank-owned in Lakeville and Apple Valley, where I have some buyers. This is going to hit the suburbs, and it will be tough, very tough.

And when one third of all listings are foreclosures -- just by mathmatical odds -- a third of all of my sales should be foreclosures. We are all dealing with this, not just the "inner city," or the late-night infomercial watchers. It's here.

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