The Lund Team Real Estate Blog

Most often bank-owned properties being sold are thought to be all rundown homes in the less desirable areas of the county listed at prices usually no more than a few hundred thousand dollars and often even under $100k. Buyers look for and want to buy bank-owned properties because they think they will get amazing deals and a lot of the time buyers do get the good deals they are looking for. Sometimes these buyers can save anywhere from fifteen to forty percent off previous sale prices occurring during the height of the market in 2004 and 2005. However, there is a large unrecognized market with limited availability where buyers can still make the same 20% savings, but applied to a much larger amount. Borrowers who own large homes close to and well over the $1,000,000 mark are defaulting on their loans, leading banks to list the property as Real Estate Owned (REO’s). As of today January 7, 2010, in the County of San Diego, there are 8,442 homes listed for sale with only 779 as REO’s, 9.2% of the total market. Out of every listed REO in San Diego, 88% of the inventory is listed below $500,000 and 97% under $1,000,000.

The remaining 3% of the bank owned inventory goes to high-end homes in the most desirable areas of the county such as La Jolla and Rancho Santa Fe. The highest priced REO home at 18117 Aliso Canyon is located in Rancho Santa Fe and listed for $5,495,000. One property at 18787 Heritage Drive in Poway is currently on the market for $2,595,000. This same home was sold less than one year ago on 7/2/09 for $3,400,000, equaling a total savings of $805,000 or 23.7% from the July purchase price. In the Bay Collection (community in the Aviara area) of Carlsbad two properties have recently closed near the 1,000,000 mark. 7089 Marsh Wren Street (5 bedroom, 4.5 baths, 3484 square foot home) sold for $1,551,000 in 2005. The next time this property was sold on 6/26/09 as a bank owned foreclosure the price would be $976,000, a 37% savings. Also, in the Aviara area, 1372 Corvidae Street sold for $785,000, other like properties listed as regular sales are priced at $1,029,000 and $1,150,000. Buyers purchasing bank-owned properties can get amazing deals and it needs not to be forgotten that these same deals are also widely available in the luxury home market.