The foreclosure discounts here in the Sacramento real estate market are virtually gone, according to a recent housing report. In the past buyers have come to expect if they bought a foreclosure or short sale property they would get a better deal than if they purchased a non-distressed house. The disappearance of any significant discount for foreclosures (lender owned properties) and short sales is being caused by the low level of inventory of homes available for sale and the increasing demand from potential buyers.
According to a report issued by the National Association of Realtors (NAR) the nationwide discount for foreclosures has fallen to 7.7 percent. Sacramento, by comparison, came in with the third lowest discount, 0.7 percent. The two communities with no discount are Las Vegas and Phoenix.
Meanwhile, the places with the largest foreclosure discounts are:
- Pittsburgh, Pa. (27.8%)
- Cleveland (25.8%)
- Cincinnati (20.2%)
- Baltimore (20%)
- New York City (15.5%)
The current supply and demand curve has made the Sacramento area a sellers market with many listing getting multiple over asking price offers within days of going on the market. We recently submitted an offer for a client in under $200,000 price range in Roseville and received a multiple counter offer which went out to 18 different agents. Of those, 14 responded with their highest and best offer. From what I was told, it was a significant over asking price offer of cash which secured the contract on this bank owned property. There was no discount on this foreclosed property, the lender received a premium.
Not only are buyers having to compete for properties with price, the terms of the offer are becoming increasingly more important. This makes it very difficult to get a house for first time home buyers who are using low down payment loans such as FHA.
December has traditionally been a slow time for the housing market as buyers and sellers are engaged in the holidays. With the new year we should start to see more homes come on the market, especially if we get some good news about the Debt Forgiveness Act being extended which will allow underwater homeowners to short sale their house without worrying about taxes on the forgiven debt.
If you or someone you know is considering buying or selling a house and have questions about if this is a good time, let me know. You can reach me at the MagnumOne Realty office in Roseville (916-899-6571) or by email to firstname.lastname@example.org.