Jul 30th 2010
You’d think that now would be the time
to pick up a bargain home in
After all, there are more than 96,000 foreclosures
to choose from, and that’s just
from the first six months of 2010, according
to the Miami Herald: “Distressed properties
are still dominating the market, with
more than half of all homes and condos
sold last month at some stage in the foreclosure
process.”
Floridians with modest nest eggs who
were priced out of home ownership during
the boom should be able to get their hands
on a sweet little slice of subdivision now
that prices have plummeted. Right?
Not exactly. It turns out that investors
are opening their purse strings, too, beating
regular buyers to the punch.
“Cash-happy investors have been scooping
up these bargain basement deals at a
fast clip, often before middle-income buyers
can get financing,” according to the
Herald. The nest egg can’t compare to the
deep pockets of developers, speculators
and investors who can self-finance, especially
in the wary world of mortgage lending.
And foreclosed homes tend to sell for
25 less than their non-foreclosed counterparts,
hard for the cash-in-hand to resist.
While it’s bad news for middle class
Americans who thought they’d finally get a
piece of the real estate pie, it’s decent news
for the
prices in Miami-Dade county are still
down from a year ago — 4 percent lower —
but they’re 3.4 percent higher than they
were in May. Sales are up from a year ago,
and single-family home prices are slightly
higher.
The real mystery is what the investors
will do with the homes. Buyers tend to be
more patient, willing to wait decades to see
their home values appreciate, whereas
investors prefer to see a quick return on
investment.
Will the homes sit empty, waiting for a
new round of bank-approved buyers? Or
will those middle class buyers who missed
out on the first round be willing to pony up
a little more for a property they missed out
on initially?
We’ll have to tune in next quarter to see.
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