Foreclosures Spreading Along With Short Sales

Foreclosures Spreading
As the rest of the country has been watching California, Florida, Nevada and Arizona housing prices plummet in the past couple of years, there has been some detached solace in being on the outside of that crisis. Now, though, with unemployment numbers rising in other states across the country, the foreclosure crisis is threatening to become a less selective predator, invading one community after another.

RealtyTrac’s first half of 2009 report this week shows how the market has changed this year. While stabilization is beginning to occur in the hardest hit regions and subprime loans are creating less havoc than before, new metropolitan areas are seeing spikes due to jobless homeowners.

Uvestor Opportunity:
More markets than ever before have an abundance of foreclosed properties available. For those with cash in hand, banks will be ready to take bids. Short sales also will be increasing, along with the competition for those properties, so it is important for investors to proceed with common sense.


Speaking of Short Sales…
With so many homeowners (estimated recently by Zillow.com at around 20%) falling underwater in recent years, the short sale option obviously has increased in profile for many appealing reasons. Sellers like them because it gives them an escape route from a desperate loan situation. Banks sometimes tolerate them because it avoids a potentially expensive foreclosure and allows them to have closure on a worsening mortgage situation.

Uvestor Opportunity:
The party that stands to benefit the most, however, is the short sale buyer. Assuming the property is obtained at a bargain price, the buyer is then positioned well to start making money on the transaction. It could be a fixer-upper, a quick flip, a profitable piece of rental property—the possibilities are as vast as the imagination.