For the first time since we began real estate here I saw a home listed for under $100,000 (above, on Cottontail Dr.). As you might suspect it needs work and is dated. It is also I think, an REO or real estate owned. That is, the bank owns it because the owner gave it back to them under duress.
There are a rising number of these it seems. As many Siskiyou County natives say, it takes months for some things to reach us up here. Like the foreclosure waves rippling through the bay area for example. This week we met with a Redding broker looking for help with the REO's and foreclosures here. He has so many, and spread so far out, that he doesn't have time to drive up and show or take pictures.
Prices per square foot are below $100 more commonly, too. It used to be that $100 per foot was the builder's cost and in olden times homes were selling at $125 or even $145, where the builder could make a decent profit. Of course older homes should be less per foot than brand new ones; they have wear and tear, often need updating, and lack modern amenities.
The home above is $63 per square foot and owned by Countrywide, one of the first casualties of the ARM loan collapse. The bank is trying to get back what they loaned the owner and it's possible they may have to take a loss on that loan if they can't move the home for the actual balance.
I'm not trying to alarm anyone however. We have all seen home values falling and in extreme cases, owners walking away from their places. Buyers do seem scarce and wary; what if I buy and prices go even lower? Some who have been in the business through previous cycles feel that we are not yet at the turning point where demand has risen close enough to supply for prices to stabilize. Maybe that will happen this year and the certainty about it all is that it WILL happen. Cycles by definition repeat themselves and the supply-demand balance will return sooner than later we feel. Our phones are ringing more lately it seems and we are hopeful.
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