Homes are around $140.00 to $160.00 a square foot in my area. They have also reached the affordability index of income vs. rent or own ratio.
I got some interesting information from a realtor in my area of CA. They told me that the banks are pricing the foreclosures a little lower than market value and they are beginning to see multiple bids on these homes which eventually end up being bid up to market value. She said many of these foreclosures receive 10 to 15 bids and some of her clients are getting burnt out on having offers turned down because something better was offered on a house they wanted. Also, some foreclosures may be 10 to 20 grand under what someone who has maintained and upgraded their house is asking, and in the end if you have to put 20 to 40 into a poorly kept and run down foreclosure it may not be such a bargain after all.
Here's what happened in the last 2 weeks. We offered 169,000 on a list of 175,000. Two other offers. It was a short sale. The bank did not accept any of our offers. They foreclosed and sold the house to a group for 144,000. The group put in grass and paint and is now selling for 225,000 (won't get it in that market).
Question why didn't the bank approve a short sale of 169,000 and avoid the costs of foreclosing?