Many buyers that we are working with continue to ask us
about the great deals to be had with foreclosed homes. Whether they are an
investor, second-home or primary residence buyer—everyone wants to know where
the deals are and what the benefits of buying foreclosed homes are.
We are very fortunate to be living in Austin, Texas
where we have steady job growth, good schools and a real estate market that is
showing signs of improvement. Despite the sunny disposition of our market,
there is a dark side. Just over 12% of all sales in Austin are foreclosed homes.
When I first read this number, my first thought was that
this seems high. In our daily activities of looking at and showing homes, we
rarely run across a foreclosure. How can this be if it represents a significant
portion of sales?
If you look at the first chart here, you will see that
foreclosed homes are very concentrated in the lower price ranges. Approximately
90% of foreclosure sales happen below Austin’s
average sales price of $246,580. In only the lowest price band does it make up
over half of sales and in the $100K-$200K price range it only makes up fewer
than 15% of all sales.
Furthermore, if you consult the second chart you
will see that the sales are concentrated in certain parts of our overall
market. Southeast Austin has been hit the
hardest with foreclosure sale making up almost 40% of all sales. Pflugerville
and East Austin have also experienced
significant amounts of foreclosure sales.
If you are considering buying a home right now, the majority
of you will not step foot inside a foreclosed home. The people that will be
buying the majority of these foreclosed homes are real estate investors.
As a homeowner, there are ways to avoid being foreclosed on.
Most banks do not want you to loose your house or have you stop making your
payments. For more information about preventing foreclosure, please give us a
call or send us an email.
Also, encourage your neighbors to do the same if you think they
may not make their mortgage payment. A foreclosure in your neighborhood can
affect the value of your home too. According to the National Association of
Realtors, if a home is foreclosed on in your neighborhood, it can bring the
value of your home down an average of 16%.
While Austin
is experiencing a small amount of what the rest of the country is dealing with,
for the most part we feel very positive about the house market. Interest rates
are below 6% and the overall value of homes is holding steady! If you are
concerned about the value of your home, sign up for our Market Snapshot
program. It is an amazing tool that you can read more about here: http://budurl.com/zaqk
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