Finding the Bottom One Foreclosure at a Time

Jonathan Dalton, Phoenix Real Estate AgentBlame this on the tree on which I became concussed earlier but here’s a not-quite-muddled thought.

Let’s all assume we agree that real estate prices are driven by supply and demand. Fair enough? Let’s also assume that most foreclosed properties carry fairly realistic price tags – the bank is less interested in squeezing the last dollar from the sale than getting the home of their books.

As more and more homes are foreclosed upon they will add to the inventory while at the same time eliminating the vast pool of phantom inventory caused by the ever-present short sales.

As more and more buyers look at bank-owned properties as the source of the “deal” everyone’s trying to find, is it possible the increase in demand will cause the market to at least level off?

When the inventory is flooded with “can’t be sold” short sales, is the evolution to foreclosures completely negative? Or does the move toward sellability (which I just made up) negate at least a portion of the negative impact?

In short … can an increase in foreclosures and the accompanying perception by buyers that there are deals to be had if only they make the move create the bottom everyone’s looking for?

Your thoughts, addled or otherwise, are welcome.

[tags]Phoenix real estate, real estate foreclosures, real estate short sales[/tags]

Jonathan Dalton

Jonathan Dalton is a 40-plus-year resident of the Valley and has been helping folks buy and sell homes since 2004. He can be reached at 602-502-9693 or info at allphoenixrealestate.com.

0 Comments

  • Port Orange Homes For Sale 10 years ago

    I think alot of people are looking into the short sales and foreclosures as the first choice right now when buying. I think investors are making all the moves right now which will later provide a higher price home. So get out there and purchas those foreclosed homes and short sales you’ll never have a better deal and interest rates are low.

  • Cash 10 years ago

    Yep- I agree with this thinking. Perceived value is key in any economic process. When everyone starts jumping on the ‘foreclosure bandwagon’ (and by everyone, I mean the media), demand will automatically boost. This will happen coming next 2 months, then die down a bit until Summer- our peak selling seasons. Naturally there will be more sales (as is normally in our seasonal market)- and the media will have a frenzy over it. This will boost consumer confidence, as the media throws the ‘f-word’ (foreclosures) in there for more hype. I think this will mark our ‘bottom’- and next year everyone will be saying ‘I wish I would’ve’…

  • Hillary Clinton Calls for Quick Action to Stop the Foreclosure | foreclosure-help-centers.com 10 years ago

    […] to hit Detroit residents especially hard. Workers World news online – http://www.workers.org/ Finding the Bottom One Foreclosure at a Time By Jonathan Dalton When the inventory is flooded with “can’t be sold” short sales, is the […]

  • Reno Real Estate 10 years ago

    Jonathan,

    You posed a very bold thought. It’s still sinking in.

    “As more and more buyers look at bank-owned properties as the source of the “deal” everyone’s trying to find, is it possible the increase in demand will cause the market to at least level off?”

    I don’t think that this will serve as a catalyst of the bottoming of the real estate market. But I am in no way discounting that this could happen.

    Interesting post Jonatahan.

    -Joe Salcedo

  • Jonathan Dalton 10 years ago

    I guess the best way to explain is I’m seeing the foreclosures in some way as a shift in inventory … a shift from “not really able to sell” short sales to can be sold lender-owned.

    This isn’t to say all of the inventory’s going to be snapped up any time soon. But this is to say the inventory’s bloated with homes that can’t be sold, making the market seem far worse than it is.

    Is it really a 20-month supply of homes when a significant portion of the supply are homes that can’t be sold?

  • Phoenix Real Estate | Phoenix Homes for Sale | All Phoenix Real Estate Blog » April Phoenix Real Estate Sales Post YOY Improvement 10 years ago

    […] Lower prices can be expected since it is the bank owned home sector fueling the current real estate market. And as I’ve said at least a half-dozen times, that’s not necessarily a bad thing. (One of the first posts was back on January 28, when sales were stagnant – finding the bottom one foreclosure at a time.) […]

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