Foreclosures in Your Neighborhood Will Decrease the Value of Your House
I found this tidbit in the September issue of Kiplinger's:
Homes lose about 1% of their value for each foreclosed property within an eighth of a mile.
As you might imagine, this is bad news for all of us for several reasons:
1. It seems foreclosures are all over the place -- thus making it likely we'll have one nearby.
2. We've probably yet to see the worst of the foreclosures -- there may be many more coming to our neighborhoods.
3. It's cumulative -- 1% loss for EACH foreclosed property near you. Ouch! These can really add up if you're in a harder hit area.
This makes sense... We've had at least 3 or 4 on our street alone, and we just signed a contract the other night to sell our house for 5-ish% less than we purchased it for. This market is just not the best time to sell if you can help it.
Posted by: Hal | September 29, 2007 at 11:22 AM
So wouldn't this be a good thing for those of us with no hope of buying a home?
Posted by: Minimum Wage | September 29, 2007 at 11:27 AM
this is fantastic news! and not unexpected given the most massive bubble of all time.
Posted by: Bronco | September 29, 2007 at 01:25 PM
This is good information for buyers looking for a discount on a home. But on the flip side this is crucial information for homeowners looking to sell their home. You want to be aware of what is going on in the foreclosure market in your area as well. As this article teaches you this has a big impact on what you will be able to sell your home for. In the event your findings with your homes value is not as good as you expected. Don't panic because you always have the option of renting your home out for a year or 2 until the market is more in your favor to get what you want for your home. This also leaves time for the value of the home to appreciate. As long as you screen tenets well and issue credit checks before allowing them to rent from you this is a great alternative to dealing with this problem. Refinancing to an interest only mortgage on your home might not be a bad idea either so you can have positive cash flow from your rental income.
Posted by: Matt Sciotti | September 30, 2007 at 11:57 AM
What site tells of foreclosure in your area for free?
Posted by: Driver Lady | October 01, 2007 at 07:07 AM
Everyone should screen their tenets.
Posted by: Minimum Wage | October 01, 2007 at 07:43 AM