Cheapest REO $60,000

The foreclosures on the market today are selling quickly, and at the moment, our inventory is the lowest that I’ve seen in the last year with a total of only 405 bank owned properties on the MLS for all of Orange County.  

The low end of the REO menu is priced at $60,000 for a one bedroom condo in Laguna Woods (previously known as Leisure World), and the highest priced one is $3,299,000 for an 8,700 square foot custom home in the guard-gated Covenant Hills section of Ladera Ranch.   I like the photo best on the 3rd most expensive REO, so that’s the one I included here.   (They just accepted an offer on 5/26, so it is no longer available!)

The 29 sales of single family homes ranged from the low of $305,000 to a high of $702,500 and averaged $432,160 at $235/square foot, a decline of more than 21%. 

The low SFR closing for the month was $305,000 for a 3 bedroom, 2 bath, 1,250 square foot bank owned home.  It was only on the market one day, and sold for $1,000 over list price.  

The prior MLS sale of this house was in the summer of 2005, for a price of $624,900.  It was on the market 17 days that time, but sold for the full asking price.  From the title company records, it appears that the house was sold again in August of 2006, for $730,000!  The loans recorded at that time indicate there was a 10% down payment, and 2 loans that came to $657,000 in financing.  Since that sale occured off the MLS, I can’t determine how close to asking price, or how long it was on the market that time.

Condo sales in April ranged from $100,000 up to $324,900 with a median price of $180,000 and an average of $189,605 ($187/square foot).  The 34 sales were made up of 2 traditional sales, 4 post-foreclosure flips, and the other 28 were either short sales or bank-owned.

The short sales are selling, although not nearly so quickly.  Since January 1, the MLS shows that 1,445 short sales have closed.  There are currently 2,385 in escrow, and 3,015 available as active listings.  The problem with trying to analyze the short sales is that there is no consistency.  Some agents keep properties in the active status, and continue to show them long after they have received offers, while others put them immediately into “backup” status, but really have no idea what the lender will take or when it might close.  This process typically takes so long that by the time the lender gives an answer, either the value has fallen below the buyer’s offer, or the buyer has found another property and withdraws his offer. 

There are 5,964 properties classified as “equity” sellers, but 43% of those, are priced at over a million dollars!  For more modest home buyers, there are currently only 1,211 homes priced under $500,000 and 2,229 priced between $500,000 and $1 Million.  (These numbers don’t add up because some of these are range-priced, so they get counted in 2 categories.) 

I’m now hearing lots of stories of multiple offers for REO properties, as well as on the lower priced non-distressed properties.  I really hope that the real estate decline is coming to an end and that the market will stabilize, but it’s still too early to tell.  The moratorium on foreclosures ended on April 1, 2009 and the number of homes that are starting the foreclosure process has increased.  Since it takes almost 4 months to foreclose, we won’t have a lot of data to report until early August.  

If you are a first time buyer, the combination of the $8,000 tax credit and low interest rates make it very tempting to buy now.  You just need to make sure that the home you buy is one that will meet your needs for several (5 to 7) years because there is no guarantee that once the market “recovers” it will begin to appreciate again!

Search ALL the homes for sale in the Southern California MLS  (there must be at least one that you like!)

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There are rumors that this is the “calm before the storm” because the FannieMae and FredieMac mortatoriums expired on 3/31, so more homes are expected to be foreclosed in the next few months.  My data sources of information about homes in the foreclosure process runs about 2 weeks behind reality, so I won’t have much indication of the true impact of this for a little while still.

For the 2442 properties that have closed so far this year, the average sale price is $328,238 ($209/square foot.)  They sold in an average of 43 days on the market at 99% of the final list price.  Many of the lenders, and their REO specialist agents, have stimulated the sales of REOs by listing them significantly below recent comps.  This, generally, has created a lot of buyer interest, and many have sold for over list price after receiving multiple offers.

I just updated all the links to foreclosed homes that are listed in the MLS, so check your favorite areas to see if you can find a bargain!

Search ALL the homes for sale in the Southern California MLS  (there must be at least one that you like!)

Don’t miss the next exciting update to this blog – click on the envelope to be notified by email! 

Thanks for visiting!