In Arizona the median sales price for bank owned properties, also known as REO homes, in October was $89,000. This is a dramatic rise from just a few months earlier. In August the median sales prices was only at $80,000. This is a jump of over 10% in only two months. So what are the reasons for such a quick jump?
1. Fewer Homes On The Market
Inventory has been dropping steadily in Arizona for the last few years. As fewer and fewer homes become available it is increasing competition, especially among investors, for the properties that do become available. It is not uncommon for a bank owned property to receive over 20 offers within the first week.
2. Word is getting out
Investors have made up the lions share of real estate transactions since the housing market decline in 2009. However, the combination of incredibly low home values and the realization that this onslaught of cheap foreclosed homes will not last forever, there are more investors than ever willing to invest in Arizona real estate.
3. Increase In Short Sales
The banks were clearly caught off guard when the economy took a nosedive, at first they were very hesitant to allow homeowners to sell their homes for less than was owed. They are finally starting to realize that while this isn’t the perfect option its better to allow an upside down home owner to sell their home than it is to reclaim the home and sell the home themselves, normally in much worse condition and for less money than would have been recouped in a short sale.
4. Rentals Are Very Profitable
Home prices are at all time lows, and rental prices are at all time highs. Enough said? With the prices they way they are currently set, you can buy almost any property and make a profit. This is why bank owned properties are being bid up much over asking price for a majority of homes.
5. Positive Economic News
Unemployment is dropping, major corporations have announced they are either relocating to Arizona, or expanding already existing operations, and metrics are beginning to point in the right direction. Potential buyers see all the other positives listed above (see items 1 – 4) plus the prospect of their home value actually increasing. I know this seems hard to believe after the last two years of constantly decreasing home values, but its time to start wrapping our heads around the fact that the market might be starting to turn around!
The median sales price for REOs is currently between $89,000 and $90,000. As recently as mid August it was only $80,000
Related Posts
- 5 Reasons Arizona Foreclosure Prices Are Rising So Quickly
- How To Compete Against Short Sales And Foreclosures
- What To Expect When Attempting To Purchase A Foreclosure
- Short Sales Vs. Foreclosures
Zac Coplan
I am a licensed Real Estate agent in the state of Arizona. I am also the publisher and designer of Real-estateArizona.com. Being born and raised in the midwest I have a love for the outdoors and a passion for skiing and snowboarding. You can follow me on twitter @zac_coplan
Looking to buy or sell a home, contact me and we can start the process.
|
|
|
Tweet |
|
