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Bidding Frenzies for Foreclosures in Fort Myers, LA, Phoenix

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By : John Cutts    99 or more times read
Bidding frenzies have sprung up again in many housing markets across the county as banks list their real estate owned foreclosures and as homeowners list their properties at prices below the average to attract interest and create competition among home buyers and investors.

The sharpest increases in bidding frenzies have been occurring in markets battered by foreclosures, short sales and sharp home price declines, but which are still considered attractive markets or great places to live despite the prevalence of foreclosures.

Among these are Fort Myers, Phoenix and Los Angeles. These cities comprise metro areas that occupy top rankings in charts of metro area foreclosure rates in the first 6 months of 2009, based on a nationwide survey of foreclosures.

In Fort Myers, according to real estate businessman Denny Grimes, a total of 4,200 homes were released to the market in February at prices below $100,000, creating bidding frenzies. According to Grimes, oftentimes banks offer their real estate owned foreclosure homes at irrationally low prices to attract buyers.

He also said that currently about 2,000 homes are available for sale in Fort Myers. The median price in the area has fallen to about one-third of the median price during the housing boom.

Grimes expect Fort Myers realtors to sell more properties this year than in the past years because of the attractive prices. He said that oftentimes investors with cash offers have been getting all the bank-owned homes even if their bids are lower than those offered by first time homebuyers and retirees.

He said that most bidding frenzies occur in price levels below $150,000. Homes priced around $300,000, which are often the prices for move-up homes, are the ones not moving. High-end homes continue to be stagnant because many sellers are holding out for price increases.

In Phoenix, homes priced under $150,000 have been getting multiple bids and cash offers even on the first day. But the cash offers have been winning even if they are lower bids because sellers prefer not to be bothered by mortgage financing and strict appraisals.

In Los Angeles, where home prices have gone down by 35 percent from their peak levels in 2006, renewed interest from buyers have sparked bidding frenzies. In the area covered by Los Angeles, Santa Ana and Long Beach, home prices have fallen to $303,500 in the first quarter of 2009, a decrease of nearly 49 percent from the record high of $593,600 in 2007.
John Cutts has been educated in the finer points of the foreclosure market over 5 years.

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