We’ve discussed the issues in competing with cash buyers in our article, “Cash talks – so bid quick!” last week. We’ve also touched on the great deals you can find in foreclosed, or bank-owned, properties. For a while, the Las Vegas area seemed flush with these discounted properties, but the deals seem to be quickly fading away.
One of the issues, of course, is the number of cash investors willing and able to grab distressed properties as soon as they hit the market. For example, the Los Angeles Times just reported that Colony Capital just made a deal with Fannie Mae to purchase 970 foreclosed homes in the states of California, Nevada, and Arizona. That’s a whole lot of homes owned by one investor! With so much of the inventory being snatched by such deals, supply and demand is kicking in again – meaning those screaming cheap sales may be a thing of the turbulent past.
According to Zillow, many foreclosed homes in Nevada are now selling for the same prices as normal properties. They are warning that if you are still searching for that super great discount, you may be a little frustrated. Any property that an investor deems good for rentals or first-time buyers (the lower end of the price spectrum) is bought up as soon as they get wind of it.
According to Keight Lynam, the chairman of the Nevada Assn. of Realtors’ legislative committee, the number of foreclosed homes on the market in the greater Las Vegas area was as high as 7,000 at one point. Right now, there are fewer than 300 available. Such a significant decrease in inventory has driven prices back up.
What does this mean to you? If you are a first time home buyer, keep a very open mind. Look at all properties – not just foreclosures. Since the big discounts are no longer as available, you may be limiting yourself. When you are ready to make an offer, you must also be ready to compete, so come in strong.