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Okay...just a question. We all know that some people extended themselves and purchased homes that were overvalued, homes that they would not be able to afford when the rates adjusted, or homes they couldnt afford period.
Said people have gone into foreclosure or are short selling for whatever reason (job loss, home is not worth what is was, cannot sell, cannot afford the mortgages payments etc etc etc).
My question is that now that we have all the foreclosures/short sales on the market. Some of them look very nice..I mean really nice. Not your "dumpy" house.
All emotions aside, if you think of this from a business side, now that those short sales, foreclosures are happening, and for the sake of arguement, if people who may at one point may not have been able to purchase into a neighborhood at 2005 pricing, yet resale homes are still too high.....say they DO find a home, they like, can afford it, find the financing..thats a good thing isnt it?
I do read on the news that in some ways it isnt....because now you have a different problem happening...you have the sketchy people now picking up the cheap "nice" foreclosures and tainting the neighborhoods.
I never thought of it like that..but I guess it makes sense in a weird sort of way....now you can have the crackies buy house, in a nice million dollar subdivision for 1/2...and "there goes the neighborhood" so to speak.
Same with the family type of neighborhoods homes between 300-500..not in a short sale for 150....you have a different socio-economic level purchasing..and bring that unwanted element in.
It that happening now? I would be curious to know from the experts or homeowners.
foreclosures and ss count as comps. The million dollar neighborhood isn't really a million dollar neighborhood if someone can buy a house for 500K. What I've witnessed over and over is the reverse of what you stated. The riff-raff came in when there were no money down loans, NINJA (no income, no job or assets) and prices skyrocketed as a result. I paid 20 cents on the Dollar for my last three, and I will put my credit score and education up against anyone, who bought at the peak, or before. If those neighborhoods hadn't been trashed by the irresponsible, and were still
"nice" they wouldn't be cheap.
Thanks..its very confusing...because of course I know that these "home auctions" and such will try and get as much as the note on the house..so it may not end being such a "deal" after all. I also know tha short sales can "take forever".
But lets not talk about the 150k below market. Lets talk about the market that a majority (I think) would fall under....300-500k. A price point where you NEED a decent income to afford and you hope that the rif raf wouldnt be able to "buy into" anyway.
Thats your middle class neighborhood, good schools, soccer moms and minivans. That same neighborhood, a SS/Foreclosure comes up....200k. Is there a rif raf threat?
Do homeowners in these mcmansiony"esq" soccer mom neighborhoods worry now..because they see foreclosures sprouting up in there subdivision and are thinking "I wonder who is going to by the joneses" house?
Are there many people out there who COULD afford the 500k home...trying to look for a deal in the same price range neighborhood and pick up a SS/Foreclosure.
Maybe I am off target..but some of the homes that are SS/Foreclosures look REALLY nice...whats wrong with saving 50-60k?
Just curious to know how the RE agents and homeowners are handling really nice new/resale subdivisions with a ton of foreclosures or SS in it...seems like having that happen..you risk the rif raf coming in.
Thanks..its very confusing...because of course I know that these "home auctions" and such will try and get as much as the note on the house..so it may not end being such a "deal" after all. I also know tha short sales can "take forever".
But lets not talk about the 150k below market. Lets talk about the market that a majority (I think) would fall under....300-500k. A price point where you NEED a decent income to afford and you hope that the rif raf wouldnt be able to "buy into" anyway.
Thats your middle class neighborhood, good schools, soccer moms and minivans. That same neighborhood, a SS/Foreclosure comes up....200k. Is there a rif raf threat?
Do homeowners in these mcmansiony"esq" soccer mom neighborhoods worry now..because they see foreclosures sprouting up in there subdivision and are thinking "I wonder who is going to by the joneses" house?
Are there many people out there who COULD afford the 500k home...trying to look for a deal in the same price range neighborhood and pick up a SS/Foreclosure.
Maybe I am off target..but some of the homes that are SS/Foreclosures look REALLY nice...whats wrong with saving 50-60k?
Just curious to know how the RE agents and homeowners are handling really nice new/resale subdivisions with a ton of foreclosures or SS in it...seems like having that happen..you risk the rif raf coming in.
In the 500K range, there will be few cash buyers, so the appraiser will have the final say. I wouldn't even consider an SS even if Ken Lewis himself told me it was "approved." Some folks don't want to buy an REO, but if they are getting a loan, any REO activity in the area will be considered a comp.
I think quite a few soccer moms have already lost their homes, too, but they have a nice 6 year old van they bought with their HELOC.
I don't think short sales or foreclosures taint a neighborhood per se. But when investors start buying and immediately renting them out, it does taint the neighborhood for anyone looking to actually live in that neighborhood.
Empty homes and homes being brought and rented out start to taint a neighborhood after a while.
In my opinion, once a neighborhood's home starts becoming more than 10-15% non owner occupied, things can go down quickly.
You don't know your neighbors. Just some random people moving in. True some renters are great, but there are a lot of renters who don't give a crap about a property and the landlords try to minimize any of their expenses by not taking care of the lawn, not repainting, cleaning the roof extra.
I don't believe there are many "investors" for half million dollar homes because they are a savvy group for the most part, and the numbers simply don't work on speculation in that price range. They would be more likely to be interested in 3 homes at $150K each or less. There are also no "flippers" around these days.
All in all, it is a very good time for first time home buyers with a good down payment to buy a home to live in. Many others thought they were buying a ATM machine, and the easy HELOCs and inflated appraisals were their doomsday.
I think the neighborhoods that are vulnerable to being "dragged down" by short sales and foreclosures are the entry level homes and blue collar neighborhoods. The buyers in those neighborhoods were, in the past, typically young families on a modest budget, single buyers with one income, or retirees living on savings/SSI. When those homes go into foreclosure the buyers are often investors who rehab the houses and rent them out. Neighborhoods with higher %'s of owners hold value much better. When the % of renters increase, the residents with a "stake in the future" of the community decreases and that is what harms the area. If someone qualifies for a loan -- especially these days -- for a property they will very likely take good care of it. Afterall the buyers who are getting loans right now are strong low-risk buyers and have no "riff-raff" history.
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