As housing experts continue to debate when or whether housing will finally turn around for good in 2010, the one thing most agree upon is that foreclosures will continue or even outpace last year.
And that will mean more opportunities for bargain hunters.
A full third of home sales in December were of "distressed properties," so either foreclosure or short sales. The latter is when the bank agrees to allow a troubled borrower to sell the property for less than the value of the mortgage.
"Overall, foreclosures in 2010 will be just as high as we saw in 2009," says Lawrence Yun, Chief Economist for the National Association of Realtors. "But the key factor is whether the buyers are ready to purchase distressed sale properties, and right now we are seeing that they are."
As with any other facet of real estate, buying a distressed property can be more or less lucrative depending on the local market. One might think that markets with a higher rate of foreclosure would offer the best discounts, simply due to a high level of foreclosure sale inventory, i.e. simple supply and demand.
But in some markets, like Las Vegas, banks are holding on to foreclosure inventory in order to keep prices from plummeting. By slowly releasing properties, they can create bidding wars.
Foreclosures make up a whopping 74 percent of all sales in Las Vegas these days, according to a new survey by Zillow.com, but they only offer a 23 percent discount off non-foreclosures. That's because, again, the banks are controlling inventory.
