Top Markets for Short Sales, Part 2. Last week I wrote about Las Vegas (read the blog here). This week, I review two more areas. Many real estate investors believe that short sales are a thing of the past. There are so many local, state, and federal regulations that govern these transactions. Regulations include how much profit you can make and in what time frame you can make the profit. Consequently, many investors have opted to pursue other investing strategies rather than continue doing short sales. However, for investors who know the best markets, the short sale, can still yield significant returns on time and money Knowing the best spots in the country for short sales can also help maximize your success in this industry. Here is the first area for hot short sales today:
Most of California
Although the housing markets out west are improving, large parts of California are still underwater, making the state a good one if you want to focus on short sale investing. Nearly a third of California homes are underwater (27 percent), and the state boasted five of AOL Real Estate’s “top 10” short sale cities (Bakersfield, Vallejo-Fairfield, Fresno, Visalia-Porterville, and Santa Barbara). California homes take an average of 235 days to sell via short sale from the time they hit foreclosure, so, as in most states, you will have to be in the game for the “long haul,” but real estate investor are netting between $20,000 and $55,000, on average, when they sell that short sale on the open market. Many of California’s formerly hardest-hit areas, like Los Angeles, were short-sale hotbeds just a few years ago and now are recovering with staggering numbers such as 23.7 percent appreciation in Los Angeles’ case. If the same holds true for some of these other cities, in a few years you could be happy you bought and held a short sale this state.
Grand Rapids, Michigan
Want a relatively brief short sale timeline and an average discount of around $40,000? Grand Rapids, Michigan could be the short sale capital of your real estate investing world. With “only” 191 days, on average, to close a short sale and a dramatic increase in the number of homeowners doing these transactions in the area (up 81 percent in Q4 2012), Grand Rapids homeowners and their lenders appear to be ready to make a deal with savvy short sale investors. With Michigan State University (MSU) starting to do some serious real estate development in the area, Grand Rapids also appears to be poised to enjoy some of the benefits of being a college town, such as relative insulation from real estate swings, a constant influx of new inhabitants, and the ongoing need for housing for students, professors, and research professionals.
Some real estate investors say that the time for short sales is over now that so many real estate professionals are involved in the business and the federal government is attempting to regulate how much profit can be made on the transactions. I believe that short sales will be around for a long time..especially since HALF of the homes in America are under water!!!
Paddy Deighan J.D. Ph.D