The INEVITABLE "Flip That House II"..."Low prices pit investors against traditional home buyers"

[Amerigo Vespucci]

Low-priced foreclosures incite bidding wars
A feeding frenzy that is pitting investors against traditional home buyers

http://www.msnbc.msn.com/id/32011159/ns/business-real_estate/

PHOENIX - Each time Lance and Kelli Thorson thought they had found their first home, someone would outbid them. It's already happened at least 15 times.

This wasn't how it was supposed to be in a depressed housing market like Phoenix. Buyers are supposed to be able to walk in, and get pretty much whatever they want. Now, the Thorsons have taken up a tactic not seen since the heydays of the housing bubble — they are making offers on homes before they've seen them, as many as three per day.

"It's frustrating because we've jumped through all the hoops and there still isn't a reward," Kelli Thorson said.

In Phoenix suburbs and other areas of the nation saturated with foreclosed homes, low prices for bank-owned properties are sparking bidding wars that drive up sale prices, entice investors and frustrate traditional buyers who make dozens of offers and still can't land a home.

Experts say the environment is strikingly similar to what they saw at the height of the real estate bubble.

[dana_b]

1. damn

I hope they can find something. Others go in to make a killing when the market comes back and these folks just want a place to live in NOW.

[The_Casual_Observer]

2. Is it possible that the other "bidders" are fraudulent?

Perhaps they have no intention of letting those properties go at a low price.

[panader0]

3. Another really sleazy way to profit from the recession:

When people cannot pay their land taxes, investors can pay the taxes and make 20-plus percent when the tax is paid, a much higher return than most other investments. If the tax is never paid, the investor gets the land/house for the cost of taxes. There are several folks around here who make a living this way. Taxes, paid or not, are a matter of public record.

[RB TexLa]

4. walk in and get pretty much whatever they want????

So auctions are supposed to somehow let certain buyers be able to bid by themselves so they can "get what they want?" I guess next time I go to an auction I'm going to ask everyone to leave and say I'm the person who should be able to "walk in and get what I want."

[izquierdista]

5. Yet, HUD still has inventory

There are some good deals to be had on houses that the bank repossessed and then ended up giving back to HUD when it didn't cover the outstanding loan. I should know, I'm in a nice little fixer-upper now.

[dysfunctional press]

6. are lance and kelli ultra-low-balling people to try and get a real 'steal'...?

you'd think that they'd get the gist of it by the time it's happened 15 times.

[girl gone mad]

7. Add that to the list of reasons why..

we are nowhere near the bottom for residential real estate prices.

http://www.ritholtz.com/blog/2009/07/why-housing-isnt-yet-bottoming/

Banks still have a few more "investors" to bilk. Until we get back to real buyers and sellers, sans the greedy middle men hoping to score some easy passive income, we won't have true market pricing. Families like the Thorsons might consider renting in the meantime.

[itsrobert]

8. Temporary. The banks are keeping their inventory off the market

Soon they will unload them.