Banks Compete for Home Sales: REO's are Cheaper

Trulia did a very interesting study comparing home sales prices to bank foreclosed sales and found a significant price spread. REO prices for similar homes are competing for sales of existing homes and driving prices down.

According to the Trulia study the banks have $14 billion dollars of foreclosed homes inventory and rising. The REO home is priced at a discount to the existing homes for sale by a whopping 20%. The median list price for a San Francisco home is $780,000 and the median price for a bank owned home for sale $680,645.

If its reasonable to conclude that the low end of the list price range is now 20% lower than the todays listing price of non bank owned property, then we have a ways to go before we hit what Greenspan calls "price equilibrium".

Thanks for Reading
Howard for

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