Aliso Viejo bank owned properties selling fast
Photo by D’Arcy Norman
Earlier this week, the Lansner blog reported that bank-owned properties were seeing a lot of activity in the marketplace. That’s a big change.
About 6 months ago, Countrywide held a seminar for Realtors (R) describing Countrywide’s practices regarding loss mitigation, short sales, and bank-owned properties or “REOs.” At that time, the Countrywide REO department said they weren’t just going to give away homes by pricing them very low. Some agents that work REOs got upset with this stance, because their REO homes weren’t selling and they pointed to the banks glacier-like movement on price as the culprit.
Today, bank-owned homes are selling. As an example, in the Aliso Viejo area for homes up to $400,000 (logically, the hottest price range under the old conforming loan limits) there are 93 active homes and 33 in escrow, about a 3 to 1 ratio. We consider this niche a sellers’ market. There are 8 bank owned properties active and 8 in escrow in that same price range, a 1 to 1 ratio. The bank-owned market in this niche is an extreme sellers’ market.
Why are they selling faster? Having seen many of the bank-owned homes in question, we can assure you that the homes aren’t selling because they show better. Nor, as one commentator to the Lansner blog suggested, are they just in more demand because people are looking for bank-owned properties. Our clients want bank-owned properties, because they are generally priced well they tell us. If they find a bank-owned that is overpriced, they don’t generally ask us to show it to them.
We believe the answer is that bank-owned properties are just better priced. They are consistently the lowest priced home in our clients’ searches. And, unlike short sales, bank-owned properties negotiate in a relatively short period of time. There aren’t enough out there in Aliso Viejo, Irvine, Laguna Niguel and other South Orange County cities to make it the focus of a buyer’s search. But if you’re a buyer in these areas, especially in the starter price ranges, you’re sure to run across them.
Also, sellers need to be cognizant of what the bank-owned properties in their neighborhood are selling for. Those may become the next comparable sale for their home.