We attended a meeting today to discuss home and condo auctions. While this way of selling homes is common in other areas of the country, the process of liquidating homes at auction is uncommon here. The homes and condos sold at auction most likely will sell for much less than what they were listed for.

 

The current housing market is very strong for homes below $400,000. In fact, it is referred to as a seller's market (see entry below--Home Sales for the First Half of 2009). But if it truly were a seller's market, prices would be increasing. Instead, anecdotal evidence suggests that prices are still coming down. Why? Probably because there are so many short sales (distressed) and foreclosures at all price brackets, but especially at the lower prices. Distressed and foreclosed homes typically sell below what they should sell/ for becaused the seller (sometimes a bank) is anxious to get out of the home, or the home is "trashed". Also, buyers expect to less for a distressed or foreclosed home.

 

Having homes on the auction block will, unfortunately, contribute to the continuing decline in prices. We may not be at the bottom of home prices yet.