All About Foreclosures
Foreclosures, short sales, and courthouse sales exist outside the usual buying and selling routines.
Whether you are interested in a short sale (where the seller still owns the property), a foreclosed property (where the bank now owns the property) or a courthouse sale (where the bank is working toward re-claiming a property), proceed carefully.
There are benefits as well as pitfalls connected with these kinds of real estate purchases.
Foreclosure history in the High Country market
Map of 100 North Carolina counties separated by region. c) NC DPI and NCPedia, 2020.
Typically, there are never a lot of foreclosure properties for sale at any given time in our market. However, more foreclosed homes became available during the 2008 recession. This trend continued for many years after the immediate downturn. There will likely be more for sale in the next few years.
In a normal year, the real estate inventory fluctuates from about 30 homes for sale at any given time in MLS to about 60 foreclosed homes in all of MLS. Our local MLS covers Watauga, Avery and Ashe Counties with spillover into other adjoining counties such as Caldwell County, Wilkes County, Allegheny County, or Burke County.
The highest number of foreclosure listings I saw in MLS during the 2008 recession were 100 foreclosed homes. Since the 2008 recession, there have been around 1800 - 2500 homes listed for sale at any given time. Foreclosed homes have now become a very small but active of the real estate market.
- Please note that there are certain price ranges where the market is not slow. In fact, in certain locations, foreclosures often come with bidding contests. These properties, usually near Boone, receive multiple offers as soon as they come on the market.
- Homes under $175,000 (near Boone, value-priced, in good condition and in good neighborhoods) are also subject to multiple offers.
If you're looking for a full-time home
Keep the high demand for affordable homes in mind when you look at new listings. On many foreclosures, you need to be prepared to make an offer immediately. Know your credit score, know what your credit history looks like, have your down payment on account, and have 3 years of tax returns available for your lender to review.
Please contact me to discuss the pros and cons of each type of distressed property purchase.
Foreclosures can represent incredible opportunity for the buyer who is cash and credit-ready to take advantage of under-market price property. These properties come in all price ranges, from mobile homes to new log homes to luxury resort homes in a gated golf community.
What's thriving in our market today?
Four extremely strong real estate market niches continue to thrive in our local market:
- ASU student condos and appropriately-zoned single family homes which allow multi-family use
- Affordable single family homes conveniently located to Boone or Blowing Rock
- Residential neighborhoods within walking/biking distance of Appalachian State University are highly desired by ASU faculty and administrative staff
- Higher-end single family homes
- Foreclosed properties or distressed seller properties
Turning foreclosures into rentals
The demand for long term rental property is high in our area. The inventory of homes available for long term rental is also high.
But many second home owners are not receiving the vacation rental (short term rental) they have received in the past years.
More than at any time in the past two decades, many second home owners have placed their homes in a long term property management program to assist the homeowner with the mortgage on their mountain vacation/retirement home. However, most of these homes are fully furnished – decreasing the rental choices for families who are moving to our area and also have a house full of furniture. These families need an unfurnished home to rent for six months to a couple of years.
Whether for your own use or for potential rental investment property, you must be careful about the pricing and location of those foreclosed properties. Not every foreclosed property will provide decent rental income.
My motto on buying foreclosures: Act fast!
If I call you, e-mail you, post a video on Instagram or blog about a newly listed foreclosure, and I talk about it being well priced, you need to preview it ASAP if you are interested.
On one notable foreclosure listing, I had a house that was shown 7 times in one day. By the end of the day, that property had two offers. That was not even one of my company listings.
To sum up: you are not the only one watching for bargains in this market. You must be ready to act.