Without a doubt the influx of foreclosures are is putting downward pressure on real estate prices nationwide. However, in Ohio is it a disproportionately higher problem than the rest of the country? We looked over at a post from The Mortgage Reports for some insight and a great graph. It turns out that in Ohio just over 20% of all homes SOLD are foreclosures, which is 10% less than the national average of 31%. Still Ohio is #17 in the nation for the highest percentage of all closings being foreclosures.
So the question is HOW MUCH DOWNWARD PRESSURE are these foreclosures putting on the rest of the market? According to The National Association of REALTORS® distressed homes sell for 20 percent off. So in theory a foreclosure impact adjacent home prices by as much as 20%, but in most cases not that much. Why not that much? Because when Real Estate agents and appraisers evaluate home values during listings and appraisals foreclosures and short sales are not typically treated with the same weight as consumer owned property. Some buyers may opt for the discounted distressed home taking them out of the pool to buy up consumer listed homes.
If you are considering buying a distressed property contact me for research, advice, and assistance in negotiating with Banks and Servicers.