Southern Oregon MLS Stats Feb-April 2010
Well, the numbers are out again for the sales in the area. I have downloaded the whole file so that you can see them all. It appears that some things look promising…the number of ‘normal’ sales which are
the ones that are not bank owned or soon to be bank owned such as a short sale. These seem to be a large number of the sales at first glance. For existing homes they add up to 51% of the sales where REO’s or properties commonly called foreclosures are only 38.8% of the sales. Click on this link to see the stats in detail. stats may 2010
The most telling number…the short sales. These constitute 10.2% of the sales. When you add up the short sales and the REO’s which are basically transactions controlled by banks, it is approximately 50% of the market. Of properties on the market foreclosures are only 6.6% of the total. That tells me the banks are doing a good job of unloading their properties. In order to unload them they have to price them ‘to move’. What this means is that all other properties are in need of the same kind of pricing. If you want your home to sell or get looked at, the market demands you are at the same price as a foreclosure.
Consumers tend to believe that a foreclosure is a ‘great house at a great deal’. In some cases this is true. Generally a foreclosure is a home in which the seller lost all hope and let it go in more ways that one. They let the yard go, general maintenance on the home, sometimes the home has been stripped of appliances and even fixtures such as cabinets, lights and other removable items. When you purchase a foreclosure, you get what you get.
In a deal I recently closed my buyers got a great price on a house in East Medford. It was a foreclosure and it needed work. After the whole house inspection there were FIFTY items that FHA required to be repaired before the transaction could close. These weren’t minor items either. The buyer ended up having to raise the price of the property to cover the repairs. The repairs ranged from a HVAC system that actually worked, to ducts that weren’t full of water and mold, to a range/oven that turned on, and then a whole host of other repairs including a new shower that wasn’t covered in mold and held together at the drain by duct tape. Fortunately for us the buyers were well connected with contractors and got the whole thing done for an amazingly low price.
As you look at foreclosures, just remember, when the bank says ‘as-is’ that is generally exactly what that means! It appears that the banks are holding a bunch of properties off the market in order to not flood it with foreclosures and thereby driving up home prices a bit as people are competing over the available properties. That does not change the fact that there are whole flood of foreclosures yet to come!
On a final note, the stats show that home prices in our valley have dropped as a whole by 30.2% over the past five years. Talent and West Medford have lost over 40% of their value. It appears the pricing is stabilizing and with the lenders expecting a 1% increase in rates over the next year it might be somewhere close to the bottom in pricing. But then, my crystal ball could be a bit cloudy…..
About Jan Garcia
