Economists are telling us what we already knew here on the Westside: that home buyers may not get as great of a deal on a foreclosure as they once did. This, according to Paul Diggle from Capital Economics, is the conclusion of his new report.
Foreclosure starts are falling and the inventory of foreclosures has been decreasing, which has caused the discount on foreclosures to lessen. Taken hand in hand with our shortage of inventory, and an excited pool of buyers, we are continuing to see multiple offers and upward pressure on prices and appraisal values.
The discount on foreclosed homes compared to other homes has fallen to a 12 percent average, according to Diggle. That was about the same percentage prior to the housing crash, he says. Last year the foreclosure discount averaged about 30 percent.