Is now a good time to buy foreclosures?

Q:  Is now a good time to buy foreclosures? It seems that there are plenty available and that they are being gobbled up by investors.

 

A:  It depends on your local market. Check www.realtytrac.com for information about foreclosure sales in different parts of the country. For example, Mississippi had only one foreclosure sale in every 3,886 sales in July 2012. Florida had one foreclosure sale in every 352 sales during that period. The highest number of new foreclosures occurred in California (42,081), Florida (25,554), Illinois (13,774) and Georgia (10,861). Although buying a foreclosed property can be a good way to obtain a property at a low price it only makes sense if the property rises in value and/or the rental rate on that property will support the investment. There will be more renters as a percent of the market for the time being for the simple reason that many people who bought houses through subprime mortgages could not afford them have now become renters. That should drive up the market for rental properties in many areas.