There appears to have been a slight dip in the sale of Financially Distressed Properties over the last few months. This could be good news, or it could signal that banks are taking more time to put property on the market.
In the past, banks have put REO property on the market with little or no repairs or improvements, leaving that entirely to the buyer. The thought behind this was to price the property so low as to make it move and let the buyer do the repairs. That was in a normal market!
Today's market is acting much differently. Any buyers in a position to purchase are being much more selective, and banks are finding that they are sitting on property longer, and settling for less for the sale. They have seen the wisdom of making necessary repairs, and even making improvements to increase the value of the property. This is more a reflection of the laws of supply and demand than anything else.
Another interesting trend is that buyers are having a much more difficult time in obtaining a loan for a property. Not necessarily because of their financial condition, but more reflective of the property itself.
I hate to pick on Fifth & Poplar, but the combination of rentals in the building, along with delinquency in paying the HOA dues are causing underwriters refuse to give a loan for that property in some cases. The good news for Fifth & Poplar is that the current property re-evaluations have significantly reduced the tax value and therefore cutting the taxes in half in some cases.
In the current downtown Charlotte market, 84 units have either sold or are under contract, 33 of which are Financially Distressed. In 2010, 33 units sold and 5 were financially distressed. Clearly the market is picking up steam.
In the past, banks have put REO property on the market with little or no repairs or improvements, leaving that entirely to the buyer. The thought behind this was to price the property so low as to make it move and let the buyer do the repairs. That was in a normal market!
Today's market is acting much differently. Any buyers in a position to purchase are being much more selective, and banks are finding that they are sitting on property longer, and settling for less for the sale. They have seen the wisdom of making necessary repairs, and even making improvements to increase the value of the property. This is more a reflection of the laws of supply and demand than anything else.
Another interesting trend is that buyers are having a much more difficult time in obtaining a loan for a property. Not necessarily because of their financial condition, but more reflective of the property itself.
I hate to pick on Fifth & Poplar, but the combination of rentals in the building, along with delinquency in paying the HOA dues are causing underwriters refuse to give a loan for that property in some cases. The good news for Fifth & Poplar is that the current property re-evaluations have significantly reduced the tax value and therefore cutting the taxes in half in some cases.
In the current downtown Charlotte market, 84 units have either sold or are under contract, 33 of which are Financially Distressed. In 2010, 33 units sold and 5 were financially distressed. Clearly the market is picking up steam.
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