I’m selling a foreclosed 3.3 acre parcel in a gated community to an Investor who is planning to quickly put the lot back on the market at a significantly higher price to achieve a strong yield in a short period of time. He was concerned that his sale will establish a new comp for the area and thus drag the market down to his price in the neighborhood preventing him from reaching his investment objective. That’s a great point to consider. This is a community where lots were selling from $375,000 – $450,000 when sales stopped a couple of years ago. There are 3 or 4 lots currently available for $295,000 – $395,000 but no signs of recent activity. At the price he is purchasing his lot, he will be able to market it at $230,000 and achieve his investment goal. In a community with few if any foreclosed properties, an individual distressed sale will not have the impact on comps that one might fear. Furthermore, bringing 1 lot on the market at a significantly lower price than the others will provide a huge advantage to that lot. Especially when it’s at a price point that is showing a strong increase of interest marketwide, ie. custom lots under $250,000. In a community that is filled with foreclosures and distressed sales, his point is a valid one. In that community you must buy a really good lot at a distressed price, not just any lot to protect your future investment.

I’ve seen a huge upsurge of activity lately in end users and investors picking up tucson foreclosed lots. We must sell off this inventory before we can see a recovery of more normal sales  take place. The quicker these sales happen, the sooner recovery comes. I’m feeling fairly optimistic that the system is working and we’re moving in the right direction.

This entry was posted on Tuesday, April 13th, 2010 at 8:15 am and is filed under News. You can follow any responses to this entry through the RSS 2.0 feed. You can leave a response, or trackback from your own site.