The Wall Street Journal today had a feature story about an entirely new threat to housing values. Until recently it has been primarily banks selling off foreclosed properties. Apparently, now it is the trusts managing the huge pools of securitized mortgages (mostly sub-prime) that are selling the bulk of foreclosures in many markets. Many think the banks are inefficient and cumbersome with respect to how they manage their real estate inventory. But the trusts are apparently much more cumbersome and heavy handed, as they just dump large blocks of inventory on the market with little concern about getting the best possible price.
Given that most of our clients are still forced to bid way over asking price for most entry level properties, it remains to be seen how this new source of inventory will affect California. We have a client in San Francisco, for example, who is paying $410,000 for a tiny home that was listed for only $280,000. And, her bid just barely put her over the top according to her agent.
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