Multiple offers are being made by homebuyers in the real estate market in Bakersfield as lower interest rates and federal and state tax incentives continue to beckon them to the area. And the bidding war for foreclosed homes became intense with the reduced number of houses on repo home listing.
According to industry experts, the reduced inventory and offers above the list price are just artificial as further price drops are expected and more foreclosure homes will be added to repo home listing in the remaining months of 2009 or early 2010.
Some homebuyers are losing out on properties they want to purchase despite bidding above the asking price of the seller.
Industry report showed that last month, the median home sale price of single-family properties in Bakersfield rose to $135,000 from $10,000 in May.
Industry experts believe that the current market is still fluctuating and it is still too early to tell if the price of properties on repo home listing has bottomed out. Of concern to experts about the current price increase is that homebuyers are starting to bid high to lock in their auction offers for bank owned properties.
According to industry experts, homebuyers at foreclosure auctions will start their bids at high rates to ensure that they will be declared the winner. However, their offers are subject to appraisals which often are too low because banking institutions prefer conservative appraisals.
But still, experts agree that the current real estate market climate in Bakersfield is ideal for purchasing. They pointed out that despite the inching up of interest rates, they are still favorable and average just a little over 5 percent.
Furthermore, first-time homebuyers have federal tax credit of $8,000 which they can use as deposit or for closing cost payment.
Additionally, there is a possibility that California will extend its tax credit for purchasers of new homes.
Under the state tax credit, homebuyers would be able to receive a 5 percent credit or not more than $10,000 on the value of the foreclosed property. The credit program was capped at about $100 million but several lawmakers are calling to raise the amount.
The artificial reduced repo home listing is attributed on several factors, including banks’ delaying of the release of foreclosure homes to the market and the moratoriums on repossession sales and evictions.
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