Thank you for returning for part 2. And for those of you that didnt catch it, part 1 was posted last Wednesday and can be read below todays post.
Our last session ended with the questions about how this shadow inventory affects real estate and more specifically, how it concerns us locally.
Well…our area has one of the highest foreclosure communities in the state (country?). Yet we are still selling homes. Not just REOs and short sales either. Current inventory shows about 49% of our listings are Equity Listings. This number has remained consistent for some time now. For more stats click on over to Over the Back Fence.
That shadow inventory; yes, we know there is some, maybe even a lot. But we also think the banks will continue to control themselves and feed them into the market at a rate that helps sustain the market. We see the prices remaining a bit low as the banks now dictate selling prices according to their inventory costs as opposed to the normal construction cost. The Supply and Demand portion of the equation still applies.
So why buy now? Interest rates are fantastic! Right now an investor can purchase a home in this area and have a 300% positive cash flow from month 1! Or, if you are buying for yourself, you can quickly rebuild the cash reserve that you used for your down payment. Want to help the kids get started on their own home? Now is the time!
And these interest rates will not remain at this super low percentage forever. In fact, we believe that when the government stops pumping money into the system the banks will HAVE to RAISE their rates just to break even.
For ALL your real estate related needs and/or questions call or text ((530 315-2808) or visit us8 on line at EncoreRES.com or any of the links below.
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