Happy Valley – What is Up With Those Short Sales and Bank Owned Homes Anyway?

Happy Valley (Clackamas area just outside of Portland, Oregon) has created quite a stir for those buyers looking for a lot of square footage, new construction, a great deal, and maybe a view. It wasn’t long ago before our real estate debacle that builders were racing to build extravagant homes on the grand hillsides…. Now, they are desperate to sell them. Happy Valley is now overwhelmed with bank owned homes, short sales, and homeowners trying to sell at the same discount prices as their neighbors; quite frankly it’s a mess. For the home buyer it’s a super clearance sale at Macy’s.

 

The best deal we can expect to get right now (in Happy Valley) is approx. $120 psf (which would be a really good deal) and I think that will hold pretty firm.  PSF will depend greatly on the condition of the home of course, as well as the number of upgrades and how completed the home is, but it is not uncommon to find a home raped of everything from the light fixtures and door jams to the kitchen sink. It’s typical of the new construction homes to be vacuum ready, AC ready and void of life in the backyard as the builders stop short of those last minute expenses.

 

Short Sales: In many cases, the bank and seller are listing at a low enough price that the homes are attracting multiple offers, it almost creates a frenzy for some people (much like an Ebay auction) and people are often offering more than asking.  It’s not uncommon to see a short sale sell for more than asking (although asking can be a hell of a price). However, I think as the banks get quicker at moving these short sales in a timely fashion, more agents will invite their clients to write offers and I think there will be even less great deals to be had. The banks are taking months to respond to an offer and they reserve the right to ignore them entirely leaving a buyer hanging on the vine.

 

Bank Owned: I love bank owned homes. Once a bank inherits a home they want it sold and moved from their books. They will respond to an offer within a few days (vs. months like a short sale) and will consider all reasonable offers. There is no emotion involved with the transaction when dealing with the bank; it’s all about numbers. Write something that works for both you and is reasonable to the bank (with no contingencies) and they will likely work with you.

 

Owner Occupied/ Non Short Sales: Homeowners trying to sell have to compete with their neighbors, unfortunately most of them have little room to reduce their price and if they can’t sell low enough to compete with the bank owned & short sales they are often forced into a short sale themselves. If they have no equity in their home or are dependent on the proceeds from their sale to purchase their next home they have little room to negotiate.

 

In summary, it’s interesting times! Happey Valley is a great place to invest and live but you need to commit to living there for atleast 4-5 years while the market there recovers and the sounds of electric nail guns and hammers can return!

 

 

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