Repos Are Here to Stay

Westcoe Realtors, Riverside California…Our local paper the Press Enterprise ran a story on the front page yesterday declaring that another wave of delinquencies has been reported by lenders across the country…leading to the assumption that these delinquencies will lead to another round of foreclosures in the near future.  Reportedly, the loans now behind in payments are not sub-prime loans, but the loans that were given to borrowers with better credit than those people who received the sub-prime loans.

The reason that I quote this information is that this article totally supports the information that is being passed to our Repo agents here at Westcoe.  The bottom line is that this Repo dominated real estate market is not going away anytime soon, and as we have stated many times on this real estate blog, potential buyers must come to grips with the necessary patience and fortitude to purchase a bank owned property. 

Off the record, the lenders our agents work with (and we represent many, many lenders) have indicated that they, the lenders, anticipate a continuation of the huge volume of repossessed properties that have been flooding our marketplace for the past year.  This new round of foreclosures will show an increase in homes taken from sellers who may have normal loans (as opposed to those with hinky, sub-prime adjustable loans) but have fallen victim to economic job woes.  Hence, this cycle of repossessed homes being sold to buyers who can now afford them will not end any time soon.

What does all this mean? 

Well, as a buyer, it means that there will continue to be a large volume of inventory from which to choose.  The prices will not decrease much, if at all, because there are so many people who were priced out of the real estate market the last few years that are now back in, that the demand is still pretty strong.  As we have said repeatedly in this blog, multiple offers are the new way of repo life, and that does not appear to be changing.  Therefore, there is no pressure for prices to fall any lower as the good properties will continue to sell at a very rapid pace.

For sellers…well, it will be more of the same.  The banks are the 800 lb gorilla in the room, and as they go, so go the rest of us.  Being totally objective here, we must be honest in remembering that sellers had it their way for almost 7 years, so don’t expect these buyers who can now afford a home to shed too many tears for sellers.  Any individual seller who wants to sell will generally find a very active market…but the sales price will still have to bear up under the influence of the bank owned properties.  Those of you who shop at Wal-Mart, Costco, E-bay, etc. understand the lure of a good price…and today’s home buyers are no different.

The end result is that markets come and markets go…it’s just that this market will not be going anywhere soon.