Foreclosures coming to your neighborhood

If you think you are (and will be) immune from the coming foreclosure tsunami, you need to check out realtytrac. The (P)re-foreclosures and (A)uctions on the map will point the way to future REO (B)ank-owned properties -- and will force your neighborhood prices to be lowered all around.

Here in Orange County, CA, we have seen homes owned by bank (REO) be listed for 40+% off. For example, one home we saw was bought for $600K last year (Feb 2007) and the bank repossessed the home and put it on the market for $325K last month (May 2008) and it went pending in matter of days.

And just yesterday I saw home (surrounded by "P"'s and "A"'s and "B"'s) for sale with the following notes:

Looking for a Steal? Well, STOP LOOKING!! YOU FOUND IT! This is NOT A FORECLOSURE & NOT A SHORT SALE! MOTIVATED SELLERS Want this Home Sold TODAY!!! [details deleted] Did YOU SEE THE PRICE?? It's NOT A MISPRINT and YOU Are Not Dreaming. LOWEST PRICED Regular Sale Property Around! Bring your checkbook! HURRY!!!

So, all those foreclosed homes will lower the comps and hurt normal sellers. These days, all the normal sellers stand out since their asking price is something like $100K or $200K higher than short sale or REO prices. In fact, just few blocks away from this above home was another normal home for sale with about the same spec except the list price was $200K higher!!!

And to think that we've just reached the end of the beginning of this downturn: we'll be getting bank failures, company failures, personal bankruptcies, unemployment and/or lower hours/paycheck, higher taxes, lower pension payments, and more foreclosures/REOs. I personally believe that this downturn will be long and painful: Great Depression II or GDII.

Copyright 2008, DannyHSDad, All Rights Reserved.