The wave of foreclosures has everybody talking. Right now there are so many foreclosures out there that it’s creating an oversupply of homes for sale. There are times I’m doing an appraisal and the only comparable sales I have are foreclosures and these are not what I would use for a typical refinance or purchase. Why, you say?
The problem is that typically homes that have been foreclosed on have issues with deferred maintence, interior elements have been removed such as lighting fixtures and even sinks, they are typically filthy, and many times the house becomes stigmatized to some extent. Some would call it bad energy or just bad Fung Shui (http://www.redlotusletter.com/) that comes from a foreclosed property. People like homes that had a owner who raised a nice family there…a feel good home.
The quantity of foreclosures is creating a downward pressure on prices. We appear to be at the bottom of this “Foreclosure Tsunami” and in the next few months there will most likely be a leveling off. Once this happens the market will start to stabilize and hopefully people will stop being afraid to put their feet back in the real estate market.
Just something to think about.
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