by Bruce Wagg
on Friday, January 23rd, 2009 at 5:59pm.
I just read an interesting article on the state of home
sales in parts of Oakland. Low priced ($200,000 and less) homes are
becoming very attractive to investors. They can buy a home, rent it out, and still have positive cash flow because of
the strong rental market. Many investors are coming in with all-cash offers for
a smooth transaction with the bank.
The median price of a home in Oakland is now $330,000
which is roughly half of what it was only 18 months ago. What is driving homes
sales up and prices down is the amount of REOs (bank-owned) and short-sales
being sold. 50% of homes sales last month involved foreclosed homes, but
foreclosures only represented 14% in Dec. 2007.
Banks are also starting to list
their homes low and let the market determine the price, much like the hot times
a few years ago. It is not uncommon for certain homes to have 5-20 offers, many
over asking, as investors and families are starting to fine real deals.
Sometimes the houses sell so quickly that those who wait a day or two are
unable to make an offer. One of my clients found a house they loved only to
find out that three days after it came on the market, it had already received
16 offers. Truly a challenging market, even with the bargains available.