Before I start let me state “ All real estate like politics is local”, what may be true for my geographic area, might not be so in other areas.
As an appraiser I note REO (Real Estate Owned, by bank or other creditor) activity in the market area, while the effect of REO/SHORT sales should be considered in the valuation process, it should be assigned least weight as this REO activity does not significantly impact value of properly marketed, move in condition dwellings. The typical REO or SHORTsale in this market will suffer moderate to severe deferred maintenance, may require extensive repairs and modifications to be made by prospective buyer prior to taking title in order to qualify for certificate of occupancy, or satisfy mortgage financing requirements, and cannot get homeowners insurance if it is to be unoccupied during renovations.
The typical buyer of these reo dwellings is a contractor or professional real estate speculator/operator able to close title with a cash sale, seeking to rehab and resell at profit. Other potential buyers would be “a handyman” someone with the ability, and willingness to move into a home and plan on the next year or so of making repairs and remodeling, trading sweat equity for a considerably below market price.
The generation that was willing to do that is pretty much moving on to assisted living centers.
Today’s generation buyer wishes to move in over the weekend, then send their kids to school, and drive off to work on Monday.
I await your thoughts.