The bizarre state of REO sales
One of the most frequent questions I get concerns the REO market in Nashville.
As you know, there are far fewer foreclosures than we had just a few years ago. And the competition is fierce for the one that make it on the MLS. REO is just another term for a home that is owned by a bank due to foreclosure.
One of my clients is a technology company that manages thousands of foreclosures across the United States for several different banks and loan servicing companies.
We’ve been bugging them for data for years, and they are finally starting to listen. The numbers that I share today were gathered across the United States so they are not local. I’m expecting numbers for Nashville soon and will share those as soon as I can.
Here’s the top three REO takeaways that I got for May 2016:
- Tennessee is well below average for REO activity. The top 5 Metro Areas across the country have more than 1,500 REOs in inventory. Metro New York has more than 5,000 REOs. The state of Tennessee had only 837. Memphis typically leads the way for REOs in TN so I would imagine a large percentage of the 837 are located there.
- Multiple offers are the norm with REO properties. Across the nation, the average REO had 5 offers. And Nashville is outperforming most of the United States. I expect the Nashville average is higher based on my experience. Every REO that I have listed in the last two years has had multiple offers. One property last year had more than 40. That’s crazy!
- The Sales to Final BPO ratio was 1.04%. This means that homes were selling 4% higher than the agents last opinion of price. In this market, the listing agent likely had offers in hand when completing the final price opinion and they still sold for more than expected.
Nashville is attracting much investment from outside of this area. This is part of the reason why we have so much activity for these properties and I expect it to continue for some time.
What questions do you have about REOs or the Nashville market?