Real estate properties and houses in Phoenix used to be for sale. Then it was a short sale. By now it’s lender-owned. A year ago it might have been listed for $250,000. Now the price has been slashed to $120,000 - maybe less.
That’s a sad story, particularly if you knew the owners. And now, as you watch the parade of investors checking it out, you might feel a certain anger toward them.
If so, your anger is misdirected. Between syrupy books and movies and high-strung high-school-teachers, we have been indoctrinated to despise speculators. But the truth is, speculators are the garbage collectors of capitalism. They come in and clean up messes they did not create, returning productive value to underperforming assets.
What is your home really worth right now? It’s worth as much as the lowest-price lender-owned comparable plus the cost of returning that home to turn-key condition plus a small convenience premium. In other words, if the lender-owned house sells for $120,000, and if it will take $10,000 to make it as nice as your home, then your home is worth $135,000 — $140,000 at most.
And if you’re not willing to sell you home for that price? Get it off the market right now. It will not sell for more, but the surplus of over-priced inventory is a false signal to buyers that the market has not found its bottom.
Source: By Ideal Investment Corner http://idealinvestment.blogspot.com/
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