Day after day, I listen to the media bemoan the high numbers of homes being repossessed. As a Realtor, I know first hand we are in a tough market. So, it has been with some surprise I have found the repo market is not what the national media is saying it is. Not in Spokane, at any rate.
I know there are repos out there. I see an occasional repo when showing homes. I have friends who have listed a number of them over the past several months. Sadly, I have friends and acquaintances who are losing their homes or hanging on by their fingernails. Repos have not been a significant factor in my business, but I began paying closer attention because several long-term clients indicated they were ready to invest if I could find a screaming deal. Repos are a good place to start looking.
In recent years, most lenders have listed their repos with Realtors in order to get free advertising and to expand the market for their "used goods." I felt I could get the numbers together easily and that there must be hundreds of choices. So, where is our market here in eastern Washington?
To give you a yardstick, in May 2007, there were about three thousand homes listed in the Spokane area. The market was hot and multiple offers were common. Now, houses sit for months. Values have dropped 10-20 percent and in homes costing over half a million dollars, probably more. Currently, in the Spokane Multiple Listing Service (MLS,) there are 5,818 residential properties for sale. Of these, 603 are "pending," which means they are under contract and quickly (hopefully) moving towards closing. Another 310 are "contingent" waiting on inspection, sale of another home or some miscellaneous issue to come to pass. Clearly, we have a problem when our inventory has almost doubled in 18 months and new construction has almost stopped.
The burning question is, "How badly have we been hit by the repo plague?" Of almost six thousand active listings, only 112 are repos. HUD, a rare non-MLS user, has only three listed in Spokane County and one in the adjacent Stevens County. This is certainly not an epidemic. It is not significantly worse than in previous years and on a percentage basis, I would hazard a guess, far less. It seems to me, 12 years ago when I first moved here, there were far more repos and far fewer homes for sale. Also the cost of getting into the homes and making the payments was much, much less then.
What does this mean? I think, it tells us our Inland Empire real estate market is still strong. I believe it shows the majority of people are working hard to save their largest investment. I think it also tells us in this area our industry, both the lenders and the Realtors, have not been the scalawags the media has portrayed them to be. Finally, I truly believe this demonstrates the flexible programs we used to help people buy their homes were often not so bad after all.
My lender and I had a radio show for about a year. We often discussed some very creative lending programs, some we liked and some we did not, but, we noticed all were appropriate for some users, none were good for everyone. In the end, if we as real estate professionals work carefully with our lenders to put the right people in the right programs and keep our clients' well-being, not the transaction at hand, in the front of our faces, we will have a limited number of failures. That is ultimately our duty -- to take good care of our clients.
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