Responsible Buyers Hit by Foreclosure Fallout
Like a cancer, the foreclosure mess is metastasizing, spreading from the homes that are foreclosed to entire neighborhoods. Just having a foreclosure in your ‘hood can bring down the price of your home some six figures. This is because banks that have foreclosed on a property often unload the house at a discount to the loan amount, so the new buyer gets it at an astounding bargain rate.
But the same transactions can erase years of equity gains for those who own houses near a bank-owned property. That’s because, as most of our sharp blog readers know, real estate agents and buyers check the prices of comps, or comparable houses, in a neighborhood when pricing homes. If a number of homes the size of yours with similar amenities in your ‘hood sold for $200,000 a week ago, your once-$500,000 home is going to be worth less.
An Antioch woman told the Contra Costa Times that her home is worth hundreds of thousands of dollars less, as did Valerie Guerra, whose Livermore home has lost $100,000 in value through no fault of her own. That’s the killer – these folks have never missed a mortgage payment, yet they’ve lost money equity.
What can you do in instances like this? Grit your teeth and sit it out? Seems to me that’s the only hope, as I expect prices will fall through the end of this year and then remain low for at least five more years. What do you think? — And in the meantime, here’s some jaw-dropping bargains in foreclosure-riddled Pittsburg and Antioch just to illustrate the principle, or hopefully to encourage folks who never thought they’d be able to afford to buy. (Photo: kyz on flickr.)
1901 Mahogany Way #113, Antioch: 2 bedrooms/2 baths, 1,141 sq ft, $128,000. Yes, that’s right, we have cracked the $200,000 barrier, indeed, smashed it. Geez Louise, the place has a patio, a deck and a fireplace and is an end unit. True, it’s a condo with a $240 monthly homeowners’ association fee, but the condo complex has a pool and clubhouse. The Redfin listing helpfully tells us that a neighboring house sold for $103,000 on Feb. 22. Readers, have you seen anything (other than a totally trashed crackhouse) lower than this?
69 Lu Ann Place, Pittsburg: $179,000 price drop, anyone? This 2 bedrooom/1 bath, 817-square-foot single family dwelling has a big backyard, a covered patio, a fireplace and is close to BART. It was listed at $319,000 and the price has just dropped to $179,000.
47 Carolyn Drive, Pittsburg: 3 bedrooms/2 baths, 1,079 sq ft. This one is notable for another unusually low price – $127,900 – dropped from $174,900. In this case, the low price is more understandable, because even though this ranch-style single family dwelling has a fireplace and pool, it needs, as agents often phrase it, “TLC.” The photos don’t look so terrible, but the agent says it’s in great need of home improvement. This one is a foreclosure.
76 Dolphin Drive, Pittsburg: For those who have no interest in a fixer like the one above, here’s a better deal. 4 bedrooms/1.5 baths, 1,470 sq ft. Fireplace, lovely-looking pool, breakfast nook, stone counter, updated flooring and kitchen, back yard and patio. Was $249,900, just reduced to $199,000.
