Foreclosures and home values....

[PrincessFiona]

Does anyone know how foreclosures affect home values in neighborhoods? One of the homes in our neighborhood just sold for 120-130,000 BELOW what would have been asking price here for that home about 15 months ago. The home for sale right next door by the same builder is on the market for 110k MORE than what the other one just sold for.

The people who left the house totally trashed it inside and out...removing appliances, cabinets, knocking out walls, taking all shrubs/bushes/plants and and as the final coup d'état they even broke their mailbox in 1/2 before leaving.

Is that factored in at all or would a realtor simply look at the neighborhood comps and say "so sad, too bad". :huh:

[medpedspouse]

Re: Foreclosures and home values....

The people who left the house totally trashed it inside and out...removing appliances, cabinets, knocking out walls, taking all shrubs/bushes/plants and and as the final coup d'état they even broke their mailbox in 1/2 before leaving.

:run:

Me too!!

Geez - I could not tell you Kris BUT I've got to say I am speechless regarding the behavior described.

[PrincessFiona]

Re: Foreclosures and home values....

We all were....I had no idea how badly the inside had been trashed until our last card club...

But...shock aside...won't that be taken into consideration when considerin comp values for homes? Clearly this place is going to be a "flip", right?...something that people can sell for money once they fix it up...and the poor condition will factor into the selling price and not hurt other home prices? How does that work?

Kris

[Meenah]

Re: Foreclosures and home values....

I think it would be taken into consideration. 60 Minutes recently did a program on this (I think it was 60 Minutes). If you by a house that is foreclosed, you have no recourse for whatever the owners who lost it do to it. I have read where the people who are being foreclosed on are actually burning their houses so that they atleast get the insurance $$ and have a very slim chance of starting over. I guess they don't realize this is a crime. It is so sad what desperation can make someone do.

[PrincessFiona]

Re: Foreclosures and home values....

This was actually a really sad story and they seemed to be nice people. They just had TERRIBLE luck....he lost his job, her business went bankrupt, they lost their house....I think they just sort of freaked out and lost it.

[DCJenn]

Re: Foreclosures and home values....

I believe that it can generally impact resales because resales are reported as an aggregate for things like property taxes, etc.

On an individual neighborhood level, the realtors may or may not mention foreclosure since there is a 'vibe' about losing one's home that they may not want to pass on. I mean if you were looking and it was a buyer's market, would you buy where there were foreclosures or not?

It's not a common enough occurence in more expensive neighborhoods that it's lost it's stigma yet. If things keep going the way they are, then it'll just be a common trend, unfortunately.

NPR ran a story about a neighborhood in SoCal that has a majority of it's homes for sale or in foreclosure.

Jenn

[peggyfromwastate]

Re: Foreclosures and home values....

I would think that if someone comes in and flips it, the selling price with the flip would be the one to affect your home value. In the immediate future, the forclosed value could lower your home value if you are getting appraised, b/c then it's dependent on the "comparable sales in the area" type of thing. I don't know much about it, but if you're not worried about selling your own house right now, and so wouldn't be getting appraised/putting it on the market right now, I wouldn't think it would impact your home value. It probably will affect your CN's home value though. :huh: :huh: :huh:

[PrincessFiona]

Re: Foreclosures and home values....

CN's house is actually listed now at 65k below what they said they owed on it. Holy Crap. It's bad here.

Re: Foreclosures and home values....

There are several foreclosures in our area that are severely affecting what we're asking for our place. One and two bedroom condos that should be going for 100-140K are now listing at 60-80K. It's depressing as all get out. We basically lost the down payment money that we've put on this place because it's depreciated so much.

Re: Foreclosures and home values....

I heard a story similar to the 60 minutes one on NPR a few weeks ago -- people are angry about losing their house. Once it is clear they will have to leave, they trash it. Or in other other cases they are parting it out and selling appliances, fixtures, hardware etc to get any money they can before they leave.

I would think that anyone taking a closer look at comp values would know they house was trashed or not in a condition similar to yours. Maybe down the road someone will flip it and sell it for more. Sounds like that might be a way off.

A friend of mine who lives in a suburb outside of Denver would love to move and sell her home (she got it as part of a divorce settlement and wants to move on). There are foreclosures near her so she is just staying until the market changes.

Re: Foreclosures and home values....

I have heard that typically when there is foreclosure in your neighborhood, it lowers your home value by 2-4%. If the home is trashed and sold in "as-is" condition--which is typical of bank owned properties-- if it is comparable to your home (and you are trying/wanting to sell) then it will figure into what you could/should ask for yours.

That was about two years ago that I was told this...and it has only gotten worse. It sucks...period.

[HouseofWool]

Re: Foreclosures and home values....

Holy carp is that scary!