An article in yesterday’s Wall Street Journal asserted that individuals across the country were capitalizing on the foreclosure crisis by purchasing forecloure homes at auction then selling them later for a profit. While there may be opportunities to take advantage of the crisis by purchasing homes, the deals are few and far between and hard to come by, particularly here in Pinellas County.
A Personal Example
I bought a home at a foreclosure auction in August and got an incredible deal on the purchase, but the truth of the matter is I had been following the sale for 8 months and I was frankly lucky. Being prepared to make that bid and pay the cash required to purchase was not an affair for the faint of heart–many, many things could have gone wrong. Having said that, God smiled and when I broke into the home immediately after the sale (no-one hands you any keys), I found a home in immaculate condition.
Foreclosure Numbers in Pinellas County
After getting such a great deal, I’ve been keeping my eyes wide open for others, but I’m sorry to report that there just are not many deals out there. There are just 235 foreclosure sales scheduled to occur between December 1, 2009 and February 1, 2020. A quick review of those sales reveals not many of interest for purchase. Lots of small, old homes that probably aren’t in any great condition.
Some Quick Facts About Foreclosures and Sales:
- Barclays Capital estimates that banks and mortgage investors have 639,000 foreclosed homes for sale across the U.S., largely concentrated in Florida, California, Arizona and Nevada. That’s equivalent to more than 10% of expected U.S. home sales this year.
- Sean O’Toole, chief executive officer of ForeclosureRadar.com, a research firm, estimates that in November about 21% of homes sold in trustee sales in California went to investors rather than to a foreclosing lender, up from 6% a year earlier. The trend is similar in some other areas with high foreclosure rates, including Phoenix and Miami.
- But with some 7.5 million U.S. households behind on their mortgage payments or in foreclosure, many lenders are overwhelmed. They’re negotiating with distressed borrowers and figuring out how to sell the growing supply of foreclosed homes.
As indicated above, playing the foreclosure market is not for the faint of heart. For more information on how to work the foreclosure market, contact Matt Weidner at www.mattweidnerlaw.com.