Without a crystal ball it is very hard to predict the future, so often times I look back at the market trends to get an idea of where we have been. Using the historical data often times we can get a better feel for what might happen in the coming months.
I looked at data provided on the UNR Center for Regional Studies website which has foreclosure data going back to January 2007 for single family homes and condos. As you can see from the graph, foreclosures have been on a steady climb since they started tracking them. We saw the peak in number of foreclosures in September 2008. We then saw a little bit of a dip, most likely attributed to the moritorium placed on foreclosures by many banks. That moritorium has since been lifted so we may see another spike.
The graph also shows that the market has done a fairly good job of absorbing the foreclosed inventory. In fact in March we sold more homes than came onto the market via foreclosure here in Sparks. The increased demand coming from buyers using the $8000 tax credit will continue to help through the end of November. A rising affordability index has also been a large contributor.
As of 5/14/2009 there were 99 active “bank owned” listings of single family homes and condos in MLS in Sparks (Area 108) and 137 sales pending. Given this info I think we could see April’s numbers come in again with more foreclosures sold than new foreclosed properties coming onto the market.
We have also seen a trend with bank owned listings getting multiple offers and bidding up over asking price. Due to the fact that short sales take such a long time to close, many buyers are focusing on bank owned properties and this creates a large demand for a relatively small number of properties. Buyers should work with their REALTOR to analyze the comparable sales and make strong offers, especially if in a multiple offer situation. In some cases buyers may have to write several offers before getting an accepted contract.
It is more important than ever to work with a qualified REALTOR as there is specialized knowledge that will help you be more successful when purchasing a bank owned listing.