Foreclosures have and will continue to effect real estate prices for some time to come. Our market seems to have the capacity to absorb foreclosures at the current rate they come on the market and we’ll probably see foreclosures as a significant part of our market for a few years to come. For the state, Georgia is still high on the list of foreclosures, as you can see from the RealtyTrac chart of foreclosures per capita:

Foreclosure Data For Georgia

A buyers’ chances of finding a great deal on a foreclosure vary by state, and similarly, they vary by area of Atlanta as well. I wanted to see what the impact of foreclosures have been on North Fulton so I compiled that information from FMLS. Looking at Monthly Total Sales and Distressed Sales for the past 12 months we have seen a slight uptick in the percentage of distressed sales.

North Fulton Foreclosures as a % of Total Sales

What’s The Impact

Well, to a large extent we’ve seen the impact already. Home sellers have had to price their properties accordingly. And those sellers that do price accordingly get offers in a reasonable amount of time (less than 120 days). I don’t think that we will see home prices erode any further with the current rate of foreclosures. RealtyTrac reported that for Georgia there were 39,911 foreclosures in Q1 of 2010, which is up 30% over Q4 2009. In North Fulton the increase over Q4 2009 is about 4.5%. Fewer foreclosures in our area means we shouldn’t see an increased negative impact on sales prices unless your community has been hit with a much higher rate of foreclosures.

The Right Buyer for a Foreclosure or Short Sale

Who is the right buyer for a distressed property? Sure it can be anyone, but usually it’s someone with time. A short sale can take anywhere from 45 days to 120 days just to get an answer on an offer. Things are improving, but if you are moving into the area, have kids, a pet and a desire to be settled: a short sale isn’t a short process.

Foreclosures or bank-owned properties will move much quicker in general. Just keep in mind that the property is normally sold as-is, regardless of what comes up in inspection (unless it’s a major issue). Most foreclosures will need work. Usually just cosmetic, but it’s not uncommon for damage repairs to be required.

Both offer a great opportunity if the property and time-line fit the home buyer’s criteria.