Overly Low Priced Foreclosures and State of the Market

[Account Closed]

The banks around here appear to have gone nuts, the way they are pricing their foreclosures. I suspect that they are inadvertently generating more foreclosures as people who CAN pay their mortgage look at the asking price and decide to stop paying. Nobody wants to pay on a $400k mortgage when the banks are selling the house next door for 150K.

At any rate, I spoke to someone who has been trying to buy a foreclosure and she told me that she'd look, go back to make an offer, and the banks would already have 6-7 offers.

So I am hoping that the low asking price is a ploy to generate a bidding war. Still, I think it is short-sighted as it skews the expectations of buyers and encourages mortgage holders to walk out on their mortgage.

The market around here seems to be picking up. 2 houses within a block of the one I have for sale sold this week, and 2 more down the other direction within a 1/2 mile. All four of them are more expensive upper middle class homes, and brought acceptible prices (for this market).

My (ex) agent tells me that houses in the 100k range are selling as soon as they are listed. It has to be to investors, because at that price range, they are mostly places that are not financable, so weren't selling through the $8,000 buyers incentive.