In about 3-5 years, I think you’ll find plenty of properties 50% off peak prices. But as of now, it seems banks are very very reluctant to lower prices. There’s a bank REO near my son’s school, and it’s said Bank Owned on the sign out front since August, when they failed to sell it at auction. This house is owned by Wells Fargo. Why wouldn’t they lower the price enough to move it?
Auctions generate a lot of hype, and people end up overpaying. Plus, you cannot do inspections, and you could end up with a house requiring a new roof, new foundation, anything….. plus you need to bring a cashier’s check for the full amount. So unless you’re an investor with deep pockets, it’s a big risk I think.
I have not heard of any foreclosures which sell below market prices.
Just think about it, why would a bank or homeowner sell anything below market price? Because they like you so much?
Foreclosures will be very cheap only when there are so few buyers, that you could hardly give away a house. LIke in the 1990’s, when banks couldn’t sell their homes. Even nice homes on the beach in Laguna Niguel had to be rented out for several years, until the market turned around and the banks could sell them.
As my landlord, a housing investor says, “Foreclosures are nothing!”
Good question though!
I hope someone who has actually dealt with foreclosures can add to this discussion.
