How Low Will The Banks Go?????
“The banks are so eager to unload repossessed houses that they’re discounting them at 40% to 60% below market value and selling them, generally speaking, in ‘as is’ condition.”
Folks, we are still in the busy Spring selling season. Default notices are increasing rapidly which means more inventory is coming back to banks in coming months. As sales slow even further, and inventory keeps rising and rising, expect even further price concessions.
Not only that, the economy is still supposedly strong. Imagine what happens when the layoffs really start kicking in. States and Municipalities are just starting to cut back. Month after month tax revenues keep declining.
If we reach the super saturation point of inventory supply, simply too much inventory for demand to absorb...we could see unheard of price reductions.
In Florida, maintenance costs on a luxury condo runs about $1600-$1800 per month for taxes, insurance, and HOA fees. In many cases, the condo can't rent for $1600 per month due to excess supply vs. demand. For a cashflow oriented investor, he would not even take that unit if you gave it for free.
In Miami, after new condo are completed in upcoming months, we could be looking at over 15 years of supply on the market for sale. How low do you think the banks will go in that environment?