Supply and Demand for Real Estate
The local paper, the Bend Bulletin, published an article in the Sunday paper with a head line on the front page:
"Central Oregon VS. The State - Foreclosure rates are worst here" They calculated 3.9% of all homes in Bend were foreclosed on between 2008 and 2011. Oregon's average foreclosure rate was 1.4% according to the Bulletin. Is that a bad thing? It is a surprise!
It's not surprising because Bend and Central Oregon was leading the state and the country at time in appreciation of its real estate. Prices were going up 25% to 30% a year. Bend is such a great place to live, own investment property, have a second home or a vacation rental everyone was buying Bend Oregon real estate.
Some investors would put down $10,000 on the purchase of a new home yet to be built in a subdivision and tell the builder there was no hurry to complete it. Then the builder would ask if he could delay it further because there were people who wanted their house quickly. These investor would end up getting a fixed price and getting 20-30% appreciation on the full value of the house not yet completed.
There was lots of money to be made doing this. However, greed is a funny thing. Some people did not know when to quit. There were many investors who ended up being stuck with new homes worth less than they paid. Eventually all of these homes ended up in foreclosure.
Even though it's sad to think of home owners "losing their home", we should take a closer look. Many young couples and others who bought homes in 2006 and 2007 were $100,000 to $200,000 upside down in their homes. Their mortgages payments were $1,500 or $2,000 a month. They then lived in their homes for months without making a payment.
Once they lost their home they could rent back a similar home for around $1,000 a month. The landlord would make all repairs and the home owner now tenant saved $100,000 to $200,000! There's a saying that "home is where the heart is" and I believe that. I know many people (renters) who are now glad to be out from under the large payments and the negative equity. Some of those people are now eligible for loans at 3.5% interest with prices of homes like they lost about 1/2 the price they paid. So it's not all bad.
It looks like foreclosures are drying up in Bend now. There are very few available. When they do come on the market and are priced right they sell quickly often with multiple offers. To see bank foreclosures currently for sale in Central Oregon click on this link. FORECLOSURES
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