Foreclosures near light rail – Good or Bad?

There are as many real estate experts as economic experts as social media experts as.. well, you get the idea. The fact is, no one has a crystal ball and if you choose to be a negative person, you will probably live a negative existence. We hear those that say “the real estate market is dead for X more years” and we hear people say “yippee, the market is recovering beautifully!” No matter the angle, it is interesting to watch the ups and downs of the real estate market. To many, the term “foreclosure” can have a negative sound, to others it is the sweet sound of opportunity. According to this REUTERS article , “One of eight U.S. households with a mortgage ended the first quarter late on loan payments or in the foreclosure process.” Obviously, this will be a big part of our economy for a while. When the market was in hyper-overdrive, people would buy anything that they could mortgage and the banks made it easy to do so. Now, as lending guidelines change, prices adjust, investors and the average Joe try to recover, and a market looks to stabilize, people once again have the luxury of location, location, location.

Many of the real estate investors searching for property have different expectations today than in the “good old days” where homes would often appreciate $10k in a month. At that time, there was very little foreclosure activity and everything was just peachy. Fast forward to the realities of our current market and we are living in a whole new world. This morning, I looked at a report of homes listed as a “short sale,” “lender owned” or a “pre-foreclosure” sale within 1/2 mile of each station along the light rail line in Arizona. There were 162 homes fitting this criteria beginning at just $24,900, which would have been unheard of during the market frenzy. The average time on the market for these homes within 1/2 mile of the light rail line is currently 86 days with an average list price of $119,895. (source, ARMLS) Back on May 30, 2009, I did a search of the same criteria and found 180 homes for sale with an average price per square foot to be just over 2% LESS than what it is today. So, we have less homes on the market and at a higher average list price with fewer days on the market. Of course, this is just a snap shot of a small part of the overall market, but many in the real estate business are finding the competition “heating up” in several areas of town.

As investors and first time home buyers look for a “sweet spot” in and below the low $100k range, the competition stiffens. For now, there appears to be a tremendous number of homes near light rail for their choosing, but it remains to be seen for how long that will last. If a new wave of foreclosures hits the market, does that mean harm or opportunity? As always, it depends on individual situations. What we do know is that an urban lifestyle, proximity to ASU, good freeway access, many amenities, and several types of available housing make living near light rail very appealing to many people. If you are not yet ready to make a move or if lending guidelines have got ya tied down, you might still want to live near the convenience of the light rail. If so, try finding an apartment near light rail. For some, it is the next best thing. Either way, enjoy the ride…