Bank-owned homes are real estate’s new gold rush

Posted by Tim

March 25, 2008

Business - Bank-owned homes are real estate’s new gold rush - sacbee.com

This article from the Sacramento Bee definitely caught my eye. The gist of the story is that more 2,000 homes have been bought from banks in the last two months and 60% of the existing home sales in the Sacramento region are homes that have been foreclosed on by banks.

Good deals are available to those who could not afford a home in the region a few years ago and investors are scooping up properties. Sacramento was a blazing market from 2002 until early 2006 with 25% per year price increases and lotteries for the right to purchase new built homes. Many of those purchases were for investment and went to the lender when prices fell and interest rates increased.

I wrote yesterday how lower rates are now making mortgages more affordable and foreclosure rates could slow. This article is one small sign that excess inventory has reached attractive prices and a bottom may be near.

Finally, if you subscribe to the WSJ online an article today that bank owned inventory is still growing nationwide: Foreclosure Rate Outpaces Sales by Lender Is the Sacramento article a leading indicator, as things from California often are? You decide.

Fear