Jul

20

Foreclosure Numbers: Keeping An Eye On The Unknown

Filed Under Foreclosure Info, Sellers |


Share
Foreclosure numbers are going to skyrocket. We keep hearing this, but what do most people really think? Seems when I speak to homeowners, either they don’t believe me or don’t think much of the threat foreclosures present to home value.

But let’s map out some of the areas that have bank-owned properties. The New York Times sports a decent tool for mapping out foreclosures throughout the New York area. This tool was featured in the article, “Battling the Decay of Foreclosures” in the NYTimes.

It’s clear we have a challenge and I think most homeowners would acknowledge at least that much. However, one thing that I keep coming back to is, articles like these on NY Times do not demonstrate the massive amount of delinquencies that are pending, nor does it highlight the incredible amount of short sales located throughout Long Island.


Reports on foreclosures cover what is on the market on the local MLS (Multiple Listing Service). These reports do not cover what is coming down the road. For instance, a short sale is not a bank-owned property, but if it doesn’t sell and the seller walks away, it will become a bank-owned property (a foreclosure).

It’s important for homeowners to understand that a foreclosure hurts equity values in a given area. The more foreclosures, the lower the home values. The greatest area of concern for any homeowner right now should be the increasing trend for foreclosures to be setting market value. This is extremely dangerous for housing stability.

Why?

Because historically, foreclosures or other distressed property sales are generally infrequent. For instance, on a given appraisal of real estate property, a foreclosure most likely is not used to determine market value for a given property.

And you know where I am going with this.

Noooowwwww, in this crazy real estate market, foreclosures and other distressed property values are being considered and are becoming more common place for determining true market value of surrounding homes.

This is a problem for any homeowner looking to sell right now or any homeowner who wants to sell within the next 3 to 5 years.

Why is this not a problem for buyers? Good question. Real estate is a long-term investment. If you’re thinking of purchasing real estate, now is the best time. Buy low. Sell high. Two complete sentences that add up to “good investment”. If you’re in this for the long-term, buying now and riding out the next several years so that ten years from now you’re ready to sell, you will almost certainly be selling for a profit!

(c) Copyright, 2009 www.tommcgiveron.com
By Thomas McGiveron, Licensed Real Estate Salesperson



Comments

Name (required)

Email (required)

Website

Speak your mind

1 Comment so far

  1. Long Island Real Estate Market | Tom McGiveron | Coldwell Banker Realtors on July 31, 2009 6:29 pm

    […] real estate market, we continue to see foreclosures rising - steady and surely. To piggy-back my last article, I visited www.mortgagenewsdaily.com and viewed this clip from bloomberg news. It’s a must […]