There’s been a fair amount of theorizing lately about the impact of foreclosures on the overall real estate market.
One meme has it that a two-tiered market has developed, with foreclosure and short-sale properties selling within a pricing band distinct from comparable non-distressed properties. Another hypothesis is that distressed sales have more impact at the lower end of the market in less-desirable areas than on higher-priced properties in stable, affluent suburbs.
Theorizing about broad real estate pricing trends may be fascinating to some, but it’s a futile waste of time for actual home buyers and sellers whose decisions are constrained by hyper-local situations and facts on the ground.
Dennis Rodkin’s Deal Estate column offers up a great illustration of the actual impact of nearby distressed properties on a Glenview home seller whose property ultimately sold after 3 years at 58% of its original $1.4M asking price.