Competitive Bidding Has Come To a Standstill In Foreclosure Market

Posted on August 10th, 2007 by hinson

Gone are the days when competitive bidding used to take place. There were times when one person’s melancholy in the foreclosure market became the source of happiness for the other person, as it gave him/ her opportunity to buy the foreclosed property for a profit. However, things have completely changed now. The Orange county courthouse was crowded with people who came all the way to participate in the auction and bid for acquiring the ownership of the foreclosed home. All of the people tried to outbid each other to acquire the possession of property put for sale. They wanted to earn immediate return on investment.

At the time of auction, lot of potential investors turned up at the courthouse, but unfortunately all went back home empty handed. The foreclosed houses that are put up for auction are overpriced that it does not make much of sense on the part of investors to invest their money on procuring such a house, the market price of which is less than what is being asked for. The owners at default, who were forced to go in for foreclosure, were indebted with such a high amount of loan than their property was capable of fetching on being sold in the sluggish market of today.

In such a scenario, the only option left was takeover by bank. Seeing the disastrous situation at the courthouse, several banks came up with creative financing options consisting of lucrative rates and zero down payment terms. But, today, the banks are the ones who bear the loss. The cases of foreclosure are on rise. Last year, there were near about 1.2 million homeowners at default who had to face the consequence of foreclosure. As per the statistics, the percentage of foreclosure has risen up by 42% from the year 2005.

Recession has set in the scene of foreclosure. A few days back, an auction was held in which 12 houses were put for auction. The bank bought all the 12 houses and there was not even a single bid. Thus, downward trend has started taking place. For the past 1-2 years, nobody has been able to gain any profit from the foreclosure. Purchase by home owners as well as real estate investors is declining and confiscation by bank is rising. The number of foreclosure properties is increasing day by day. In fact, at present, the volume of such properties is about three times what it used to be in the beginning, which is very depressing.

The economists feel that Florida will indeed witness an upward trend and it is expected that things will improve by next year. In fact, it is being said that by next year, there will be a rise in the number of homebuyers. One of the major attractions is that the value of dollar is less than Euro and this is what makes Florida an attractive destination to invest money in. Though, investing money seems to be risky, but in the long run, it will deliver fruitful results.

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