September 22, 2008

The Foreclosure Market on Cape Cod

It may surprise you to learn that Cape Cod has had the highest percentage increase in foreclosures in the state this year. Everything being relative, the total number of such situations is not the highest here, only the percentage increase is, and the reason for that is that we had almost none for years here.

For many years homeowners here bought their properties in the traditional manner: fixed rate, fixed term loans. When the flexible term and rate instruments made their debut, along with "no doc" loans, the market opened up to many who really did not have the wherewithal to buy what they were buying. The Cape became an especially attractive market because appreciation was so dramatic for many years here and second homes became an investment vehicle for many. The rationale was that by the time these flexible deals ran out there would have been enough appreciation to refinance in the traditional markets or to sell. Well, we all know what happened. Just as those flexible deals ran out the real estate market crashed here, probably a little earlier than in other parts of the country and the Cape was faced with a glut of properties, relatively few buyers and the beginnings of its own housing crisis.

What does all this mean for the qualified buyer today? There is more opportunity. Even in the pre-foreclosure area banks are willing to look at offers they never would have considered a few years ago. True, a large number of these properties are now distressed. They need a lot of work to make them livable, but for buyers willing to invest either their own sweat equity or additional funds to improve the properties we are beginning to see some relative "bargains."

You can check out all of the Cape listings if you go to my Web site http://www.joemcgann.com and log onto MLS Propertyfinder. There you will find all of the real estate actively listed on the Cape & Islands MLS service and you can identify those properties that are in "short sale" or that are "bank owned." We've found banks to be making decisions on such properties much faster that they used to, so it's become much easier to purchase them.

Posted By: Joe McGann