Because of the market effects of foreclosed homes for sale, owners of high-end homes in Silicon Valley planning to sell their houses due to traditional reasons such as retirement, divorce, growing family, college education for children and moving up, are finding to their frustration that they cannot sell their homes even if they lower their prices a bit.
These homeowners know that they are in better conditions than others who are being evicted from their foreclosed homes, but they are frustrated that the problem of foreclosed homes has blocked their plans. They said they thought they were making safe investments when they bought homes in the area, touted to be one of the best real estate markets in California.
C.J. Brasiel, a Fireside Realty, said it is painful for homeowners to think that they could have made a fortune if they sold their homes in 2007. Now they are finding it hard to accept that they cannot sell even if they offer their homes below market prices.
The case of the Neglers, who bought a 3,800-square-foot Victorian in 1986, is a good illustration. They renovated their house over 2 years, certain that they can sell it later for a big profit since home values in the Willow Glen area were soaring.
They even started designing the getaway home they would build on an island after selling the Victorian, but their dreams were shattered by foreclosed homes. They listed their Victorian for $2.4 million last year, but no one bothered to see the home. Even when they lowered the price to $2.275, nobody offered to take a look. There had been regrets, anger, bickering and frustration, but they have realized their case is not isolated. The claws of foreclosed homes have hurt everyone nationwide.
Art Reese, founder of Los Altos construction firm Dreamworks, has listed his $2.8 million home two years ago, but has not found a buyer. John Flaig and his wife have been selling their 1,800-square foot ranch house for $860,000 because they do not have funds for renovation, but they have not received any offer. Another homeowner who was simultaneously struck with a job loss and a divorce cannot sell his house even if he lowered it to $650,000, from the original value of $830,000.
Indeed, the problem of foreclosed homes has also affected homeowners who are not in danger of foreclosure.
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