Inventory has shrunk in our market when it comes to foreclosures, so remember not to pigeonhole yourself if you want to pursue that type of deal.
Selling your Salt Lake City home? Get a free home value report
Buying a Salt Lake City home? Search all homes for sale
Do short sales and foreclosures still represent a great opportunity in our market?
I’ve personally bought and sold these types of properties for both my own inventory and for my clients, but there is a change in the market you need to be aware of. The percentage of foreclosures has dropped from 21% to 2%. That means you’re looking at a market with very low inventory.
The basic issue when it comes to foreclosures and short sales is one of supply and demand. We have such a strong demand for this market because people’s perceptions are shaped by TV shows like House Hunters and other HGTV programming. However, you shouldn’t just look for distressed properties because that only makes up 2% of the market.
“
”
Look for properties of value.
”
Instead, you should look for properties of value. You should also look for properties where people are motivated and have a higher and better use. Lastly, you should look for properties that have a cash flow and equity position and an exit strategy.
Foreclosures can be a good deal, but we’re finding out that since they’re a target where people essentially gravitate toward them, they get priced up to a retail value. After that, they're no longer a deal. Many times, these properties aren’t in desirable areas anyway.
Remember, what qualifies as a good deal for one person might not qualify for somebody else. If your foreclosure or short sale is a good property in a good area, I would advise you to pursue it, but don’t pigeonhole yourself into that corner market. Look at everything the market has to offer and find other people who are looking and motivated to make something happen.
If you have any questions about this or any other real estate topic, please feel free to give me a call or send me an email. I look forward to hearing from you.
