Foreclosure Sales Affect Nearby Home Values

If a home across the street from you has gone through foreclosure, it's likely that the foreclosure sale affects home values, not only on your street but throughout the neighborhood.

The magnitude or ripple effect of the distressed sale depends on where you live and the trend for your area. Take Elk Grove, for example. This is a suburb of Sacramento that once enjoyed the reputation of being the fastest growing city in the United States. But today, there are increasing numbers of homes in default in Elk Grove, coupled with a glut of inventory.

A client asked me to do a comparative market analysis of her home. There have been no sales in that subdivision over the past six months except for a foreclosure, which makes that sale the only comparable sale. Now, appraisers can pull comps outside of that subdivision and adjust for value, but the likelihood is that foreclosure is going to affect this client's market value.

Throw into the mix that nine out of 10 homes are not selling in any given month, and it's not a pretty picture. The best option for this client is to . . . read more

Ready to Know More About Pricing Homes? Click below:

• Pricing Houses
  
• Sellers' Worst Mistake
  
• Figuring Price Reductions

_{©Big Stock Photo}

Technorati tag: foreclosures short sales