Foreclosures are still hot with bargain hunters, but an analysis released this week by the real estate website Zillow.com shows repossessed houses might not be the steals buyers previously thought.
And that could be another sign that metro Atlanta’s housing market is slowly improving, observers say.
The median discount on foreclosures was only about 8 percent from market value both nationwide and in the metro area in September, according to Zillow.
That compares with a peak discount of 28 percent in metro Atlanta in October 2008. (Nationally, the discount peaked at 24 percent in September 2009.)
Distressed borrowers and banks are now more often coming to terms on loan modifications and other alternatives to foreclosure, reducing the supply of distressed homes, said Jude Rasmus, president and CEO of Rasmus Real Estate Group, a top brokerage of foreclosures.
Foreclosures are more often netting multiple bids, both from major investors and regular home buyers, she said.
Metro Atlanta home values ticked up in August for the fifth straight month, a key report said last month, though prices are still below January 2000 levels.
Instead of comparing the median sales price of foreclosures to the median sales price of nonforeclosures, Zillow compared foreclosure prices to an estimated fair market resale price for the properties.
Based on strictly median sales price, the metro Atlanta foreclosure discount was 56.5 percent
Zillow said that such an analysis isn’t a fair comparison, as foreclosures often have different attributes than the average house and that lower priced homes are more likely to be in foreclosure.
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