Discounted Homes Market Shrinking Rapidly

Discounted homes market shrinking rapidly according to the highly respected analysts at Real Estate’s premiere web site Zillow.  Zillow’s research shows that the repossessed and bargain homes that have been fueling the Real Estate market comeback are disappearing fast.

Competition, low interest rates and free market forces may soon make bargain basement homes an endangered species.  The high unemployment rate is a thing of the past.  Strict lending standards have been the only force that holding the housing recovery still in check for now.  Lower interest rates forecast to go even lower ensure a buyer’s market for the foreseeable future. The effects of this trend vary considerably from market to market.  Discount homes shrinking rapidly is here to stay.

“They will get somewhat of a deal, depending on the market,” Zillow’s chief economist Stan Humphries said.  “But, just generally, you are going to get less of a deal today then you would have gotten in late 2009 or early 2010.”

In Las Vegas and Phoenix, to name 2 of the hardest hit areas in the world of real estate, a foreclosed home now sells for the same price as the others.  The number of foreclosed homes on the market in the Las Vegas area has dwindled to less than 300 compared with about 7,000 at its peak.  In Los Angeles the foreclosure discount was a mere 4.2% in September according to Zillow.  A few Midwest and East Coast cities retain large discounts.  Pittsburgh leads the way with 27.4% followed by Cleveland with 25.8% and Cincinnati and Baltimore with 20.2% and 20% respectively

The national foreclosure discount figured at 7.7% as compared to 23.7% at the height of the bust.  This adds further fuel  to the discounted homes shrinking rapidly theory.

The hottest properties of all are those suitable for rentals and for first time buyers.  Investors will pounce quickly before the average hopeful home buyer wakes up.

Many lenders have lowered their credit scoring standards in recent months.  A worrisome trend to be sure.  Getting in over your head on real estate purchases is not for the faint of heart.  Just because you can find a lender to give it to you does not necessarily mean you should take it.