Hot Summer = Hot Deals?

Traditionally, the summer months result in lazy days and a slow down in the real estate market. In today’s market, a “slow down” defines the market as a whole and investors and professionals alike don’t want to even think about more of a slow down than experienced during the previous year!
Good news?
This is probably the oddest real estate year ever. Well, at least the oddest I have seen since I have been in the business of real estate. And that oddity could prove to be a bonus to the real estate market as a whole.
Over the past few weeks there has been an influx of properties going under contract. Properties that have been on the market for over 100 days as well as those that have just hit the market are being picked up at a maddening pace. What’s the rush? Upon a closer look of the Charleston, SC market, the houses going under contract are both bank owned as well as privately owned. One cannot conclude that the increase in activity is just the loosening of the bank owned property. Additionally, the list price/sale price percentage is well above 85%. Some properties are actually fetching 100% of their list price indicating the market and demand are finally reaching a meeting of the mind. An increase in price reductions also indicates a more realistic seller which in turn leads to contracted sales. However, all this we knew already. So, what really is happening?
As I see it:
– Banks are working with homeowners creating a decline in foreclosures. The magistrate auctions are down to 3 pages instead of 6!
– Banks are developing more stringent lending requirements. Private Investment Groups No more buying a home without a job Mr. Joe Public.
– Banks REO pipeline is open flowing now. No more Residential Real Estate Companies waiting 3-6 months to close on an REO property.
– Banks REO pricing is aggressive; in some cases pricing is below market in order to create a bidding war which in turn equates to a higher sales price for the bank.
– Average Seller, seeing their neighbors property going under contract, are listing and selling their properties at a more realistic price.
– Buyers are fiscally aware of what they are purchasing and the value of that purchase. Markets change and a low buy now is a tool for increased equity in the future.
– Consumers as a whole have more confidence in our economy and realize that real estate remains a viable source of investment for the future.
Do you see what I see? The predominate economic factors effecting the market are controlled by (can it be?) the “ones” that created this whole mess in the first place? *sigh*
It is true, the loosening of the REO market has increased sales. However, all indications point to a confident Buyer and Seller alike. With unemployment at an all time high, banks still digging out of their red tape horror and old long standing businesses closing their doors, it is hard to believe there is consumer confidence but, there it is. While investors are still fighting for their share of the market within the lending institutions it is the Buyers who are finding their way through the process. Sort of like a reorganization of the factors that drive the market. Real estate will always be at the beck and call of the Buyer. It would appear that now the Bank also is part of the key system that makes real estate flow. Such is the time we are in.
So whether you are a seller, buyer or an investor, look to your nearest REO to see what your property is worth and/or how much you should pay for one. The summer of 2010 will prove to be definitely a time for some hot deals and now is the time to strike while the fire is hot.

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