Frustrated Home Buyers Turning to Foreclosure; REMI Comments
The Real Estate Marketing Insider announces its opinions on news in AOL that homebuyers are breathing fresh life into foreclosure sales, which had been down in recent months.
San Diego, CA (PRWEB) December 14, 2012
The Real Estate Marketing Insider commented on news from AOL that sales of distressed properties, particularly foreclosures and bank-owned properties, were up in the third quarter and regaining traction among home buyers. REMI cautioned real estate professionals not to panic, and reminded them that diversifying into rental properties and vacation homes could help minimize the impact on their sales.
For all the good economic news of the past nine months, it´s still tough to be a homebuyer in America. The historically-low prices and mortgage interest rates have been offset by other roadblocks. Banks are hesitant to grant mortgage loans to any but buyers with the best credit scores, which means that homeowners looking to refinance or buy their first home, who may still be recovering financially from the recession, can have serious trouble finding mortgages. For those buyers who do meet banks´ stringent credit standards, the paper-thin inventory nationwide means buyers are often competing with one another for property, not to mention cash investors who can sweep property out from under buyers quite easily. For many potential homebuyers nationwide, finding their dream house hasn´t been as easy as they´d hoped.
This frustration is finally coming to a head, as buyers are returning to homes in foreclosure or short sale. In the third quarter of 2012, there were almost 200,000 sales of homes that are foreclosed or currently undergoing foreclosure. This marks a 21-percent increase from the second quarter, although this level is still lower than 2011´s.
There was some good news, however. The number of short sales was slightly higher than the number of foreclosed-home sales; while neither have a positive economic impact, short sales tend to be more beneficial to consumer and lender alike. And while the number of distressed sales increased from earlier this year, the market share of distressed sales to non-distressed sales dropped; foreclosures and short sales only made up 19 percent of transactions in the third quarter, down 20 percent from Q2.
This trend might be worrisome for real estate agents, particularly those whose portfolios consist primarily of homes for sale. A return to foreclosed properties could undercut realtors´ business, and make it harder for them to generate real estate buyer leads. REMI has this advice for agents to stay busy if foreclosures keep becoming popular:
- Diversify your portfolio. Apartments, beach front vacation rentals, and multi-family housing all represent options that can do two things: provide non-mortgage sale opportunities for clients, and dodge the middle-income client base most likely to be looking into foreclosures.
- Don´t panic. Remember that the market could change in just a few weeks, with mortgages becoming much easier to procure and new inventory being built; this turn to distressed sales shouldn´t motivate you to dump single-family housing from your portfolio.
The Real Estate Marketing Insider offered its readers tips to help them deal with a reported return to foreclosed and short-sale properties. Consumers seem to be getting back to buying distressed properties as home prices rise again and mortgages remain extremely difficult to procure. REMI recommended that agents diversify their portfolio while resisting temptation to dump housing from their holdings.
About the Real Estate Marketing Insider: REMI is an online journal that provides real estate professionals with breaking news, marketing tips, and trend analysis. REMI is based in La Jolla, CA.
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