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Strategies & Market Trends : The Residential Real Estate Crash Index -- Ignore unavailable to you. Want to Upgrade?

To: patron_anejo_por_favor who wrote (263892)	7/25/2010 4:39:42 PM
From: posthumousone	Read Replies (1) \| Respond to of 306849

maybe i have been wrong all this time....maybe banks are a great investment???? they seem to be in a no lose situation

To: patron_anejo_por_favor who wrote (263892)	7/25/2010 5:22:37 PM
From: Valuepro	Read Replies (1) \| Respond to of 306849

"There are plenty of foreclosures in Maricopa County, and banks have not been eager to push inventory on the market." That much I agree with. In fact, I have direct access to information that FreddieMac expects 13,000 foreclosures next year in Maricopa County alone. ...and that's just Freddie. "It's not at the expense of the banks....they have an unstated reserve,..." Huh? You mean to say that they (and us tax payers) are not losing anything if a property sells at the reserve price, when it could sell higher than that? Please explain. As far as "sham-wow" bidders at these events, I've seen homes draw no bids at all, and in many other cases homes go for 12-15-20 percent of the previous, pre-forclosure appraised values, questionable though those appraisals might have been. I've had no sense at all in having been to 5 of these auctions that there were ever any sills among the bidders. By the way, and in my observations, it is the investors (including contractors bidding on their own accounts) who are most interested in the damaged properties. They are, therefore, the most important element for these. Walk through, or walk around is almost always available. Skilled/professionals do not require the same level of inspections that do typical home buyers. They simply understand how much they can afford to put into a 900 sq ft house on a 3-5,000 sf ft lot, for example, and know what they can rent it for, and rental is what is on the mind of most of these people - not flipping. FWIW, I also have noticed that the ratios of prices - winning bids to original appraisals - falls throughout the day. That is, as more bidders are present in the mornings and fewer as the day progresses, bid prices drop dramatically to the point that there are many more houses going without bid as the day is ending. Cut out the investors, and even more homes will go without bid. The psychology of the typical attendee appears to be that the early bird gets the worm, but in reality those who go late (or stay late) get the prize. Also, I've seen some of the same homes come back to the bidding floor two and three times as individual bidders were rejected for financing (available at these events), or for other reasons did not qualify to continue the transaction into escrow. Every time this happened, the subsequent winning bid on the same property was much lower than the earlier one, this at least in part due to fewer bidders being in the room later in the day. I've never bid at one of these events, as I am still not comfortable that the bottom is in. But I have been drawn by professional interest (I am a retired real estate economist), and a desire to learn how these auctions play out, just in case I ever do enter the market. For an academic, and one interested in markets and psychology, these event are great fun, and free unless you register as a bidder. VP in AZ