Sales of Distressed Properties
In the RCN Investor Sentiment Survey, respondents believed that the environment for investing will improve in the months ahead. And with strong demand for housing, the likelihood of lower financing costs, more inventory, and more predictable home prices, they may just be right. •
PRE-FORECLOSURE SALES
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Rick Sharga is the founder and CEO of CJ Patrick Company, a market intelli- gence and business advisory firm that helps real estate, financial services and
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technology companies develop a position of com- petitive advantage and use it to drive business strategy, marketing, and sales. One of the country’s most frequently quoted sources on real estate, mortgage, and foreclosure trends, Sharga has appeared on CNBC, CBS News, NBC News, CNN, ABC News, FOX, Bloomberg, and NPR. Sharga is a member of the Board of the Asian Real Estate Association of America and the Board of Directors of the National Association of Default Professionals. He was a founding member of the National Mortgage Servicing Association and was twice included in the Inman News Inman 100, an annual list of the most influential leaders in real estate. Sharga has more than 20 years’ experience in the real estate and mortgage industries, including roles as the executive vice president at RealtyTrac, as an executive vice president for Carrington Mortgage Holdings, as chief marketing officer of the company’s Vylla business unit, and as the chief marketing officer of Ten-X and Auction.com, the leading online real estate marketplace. An accomplished executive with more than 30 years of experience in consumer and B2B marketing, Rick was previously the executive vice president of market intelligence at ATTOM, one of the country’s leading providers of comprehensive real estate data for companies in the real estate, mortgage, insurance, finance and government markets, and was an executive vice president for Carrington Mortgage Holdings, responsible for corporate communications, and was the chief marketing officer of the company’s Vylla Homes business unit. Sharga was also the CMO of Ten-X, an online real estate marketplace, Prior to that, Sharga spent eight years at RealtyTrac, where as senior vice president, he was responsible for marketing, business development, and data operations. Sharga has developed and executed sales and marketing programs for technology companies such as Fujitsu, JD Edwards, Toshiba, and Hitachi; start- ups like Tickets.com; and consumer brands that include Pizza Hut, Acura, and Cox Communications.
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AUCTION.COM ANALYSIS OF ATTOM DATA
after several years of declining margins, flippers’ gross profits (the difference between the amount paid for the property and the amount for which it was sold) had increased. There is pent-up demand for housing, which will continue to provide a strong tail wind for the market. The largest cohort of young adults between the ages of 25 and 34 is reaching the prime age for household formation. Most of them are looking to buy a home but failing that, they will need to find a rental property, presenting opportunities for both flippers and rental owners. Foreclosure activity is steadily— but very, very slowly—working its way back to normal levels. Investors should plan to swim upstream during this cycle, negotiating a purchase from distressed homeowners rather than waiting for the foreclosure auction or targeting REO homes.
More broadly, the Federal Reserve’s aggressive rate hikes appear to be having the desired effect on inflation, with recent reports showing the rate of inflation at 3%, just shy of the Fed’s 2% target. This should allow the Fed to stand down and the markets to set- tle down, which should start to drive financing costs down for traditional homebuyers and real estate investors. Lower mortgage rates will, eventually, encourage more homeowners to list their homes for sale and improve inventory levels at least a bit. Even as home sales and prices in some regions are in decline, there are parts of the country that are still experiencing rapid growth in population and jobs, which translates into a growing need for both owner-occupied and rental properties. States across the South and Southeast (e.g., Texas, Florida, the Carolinas, and Tennessee) are fertile grounds for investors.
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