Condo Update/Foreclosures

I ran some statistics recently for a client considering purchasing a block of bank-owned condos and was shocked by what I learned.

Looking across all price points for all of St. Louis County, the average sold price for privately owned condos for the period June 2010 to June 2011 was $198,907.  The average days on market was 142.

The REO stats by comparison to privately owned blew me away.  The average sale price was $100, 211.  The average days on market was 74. 

So, your typical REO is selling for half-price and it is selling twice as fast.  That is an amazing difference. 

Here's a fantastic example of one of our current condo listings (nowhere near average and not a foreclosure - just giving it a plug):



What do I mean by REO? 

Good statistics are always hard to come by.  Currently, the other classification labels for ownership in the local MLS include "bank owned, government owned, and owner by contract."  For convenience, I've lumped these three categories together and assumed that the vast majority are foreclosures or are moving that direction.  I am calling this category REO (real estate owned) which is how the banks refer to properties they own.



How much of the market market does this involve?  For the period reviewed, there were 974 privately owned sales and 259 REO sales.  Thus, the REO market accounted for 21% of unit sales. 


The bad news?  These REO sales certainly place some downward pressures on overall prices. 


The good news (for sellers)?   First, Looking at current inventory, the REOs account for only 7% of active inventory as of June.  I'd like to think this reflects that the bargains are clearing out.  Second, less than half of the active REO inventory is priced above $100K.  So, if you are reading this, it is unlikely that your property is anywhere near that price category.   Third, regardless of price category, we have found that the typical REO property is not in the condition that a retail buyer will find acceptable, so you - as an individual consumer owner - are selling to a different market.


Our team has had quite a bit of experience with all phases of distressed property transactions in recent years - both personally and professionally.  It is not an easy market category but, depending on your needs, it is worth exploring and it would be my pleasure to offer a consultation.