March 11th, 2010
In February there were 309 properties in king County that made it to auction. There were a total of 342 REO properties that reverted back into bank ownership. There are 563,000 house holds in King County. So the total percent of homes in King County that are owned buy a Bank in February is 0.0006% of the house hold population. That is 6/10,000th of 1%. So as a lot of us are already experiencing, prepare your clients for multiple offer situations when going after REO’s, because they are scarce. Also know the banks have teams and teams of analysts crunching these numbers, so know there will be a lot less flexibility in negotiations. So, Keep it Real. Remember Banks don’t like Escalator clauses. They will always send out a multiple offer addendum whether you like it or not. And it will be on their time table not yours. And they will take the Highest and Best Offer on the date they select. That is the tough cookies.
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March 4th, 2010
Continually on media outlets that the economy is sluggish, unemployment close to double digits, bailout nation, and what ever fear the media can drum up to keep you watching. I die laughing at how outrageous some of the terminology is. If you watch network news you could think on any given day the world was coming to an end. What does this have to do with foreclosure? Well we are bombarded by these house statics showing all of us that the leading indicators are showing housing is doomed and the commercial market has yet to collapse. Well for my anecdotal perspective in real estate backed by many charts of data. Here in the Seattle Area foreclosure filings are down 22%, from 1100-ish per month to the mid 800’s. This is out of 560,000 house holds. That is 0.0016% of all of the homes in the Seattle/King county are currently in foreclosure. People want the deals but the scarcity is causing a blood bath out there. People are hungery for real estate deals. But remember in this city a deal is going to be $0.70 on the dollar. If you think; because you saw a commercial for a house selling for 3000 is going to be found in this city; don’t fool yourself. On average you will be paying between 300 and 500k for distressed home in this city. So, if you are thinking you are going to get deals at 0.40, 0.50 on the dollar, you will be chasing ghost. Land is scares, the population is well educated, they are healthy, the job market here has international demand, the city of Seattle did not allow for Urban Sprawl; and people haven’t stopped having babies. So everyday there is less space in a city that has high demand for goods and services. Put away the idea of what you saw on TV, because it does not apply in this town. The Distressed Real Estate Market is Hot! There are more buyers than product. Prepare yourself for competition; prepare yourself to write offers higher than asking. Prepare yourself to get less than what you saw on TV.
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