More San Jose Foreclosure Homes Sell for a Bargain
August 28th, 2009 by 
Joseph Smith
The market for Bay Area and San Jose foreclosure homes in California is attracting a lot of interested buyers who want their own piece of bargain-priced foreclosure house.
According to industry experts, condominiums as low as $20,000 and single-family homes at less than $60,000 are generating multiple offers and overbidding. They said that despite market data showing a slow rise in home prices, it appears that foreclosure houses will prevent further improvement in the pricing trend.
Experts said that many cheap properties are located in neighborhoods severely affected by the foreclosure crisis, including Antioch, Oakland, Richmond, Pittsburg and Vallejo. These cheap properties are mostly short sales or bank foreclosed homes.
As an example, experts pointed out that a one-bedroom condominium at Lakeview complex in Pittsburg is short selling for $48,000. The owner purchased the property in 2007 for $228,000.
Meanwhile, many homeowners’ properties are worth less than the total mortgage they owed to their lenders. This is one factor that is a cause of concern to industry experts. They said that homeowners whose mortgages are higher than the values of their properties are candidates for foreclosures.
They added that these homeowners would lose interest to continue paying their mortgages and instead would walk away from their distressed properties and leave them for lenders to be foreclosed.
Meanwhile, the popularity of bargain-priced properties has helped entice more buyers, who are just waiting for the right time, to get on the bidding frenzy. Industry experts said that banks, burdened with repossessed homes on their inventory, have started to offer properties at very low prices to attract cash-rich buyers, especially first-time homebuyers who are laden with federal tax credit of $8,000.
Furthermore, banks are in a hurry to dispose of properties clogging their inventory because the longer bank repo homes remained unsold, the higher the costs they would incur.
According to industry experts, banks prefer homebuyers with cash for quick closing of sales deals and because many foreclosed homes are uninhabitable which means they could not qualify for a loan.
On the other hand, experts said that condominiums are cheap buys because of some financing issues. They said that government-supported loans which accounted for about 90 percent of loans in the current market, are not made available to owners of these complexes.
They pointed out that many condominium residents are delinquent on their homeowners’ association dues plus the fact that most of these units are not occupied by their owners.
