Spent the past few days in Umhlanga and did some real-estate scouting - it is absolutely amazing how prices have declined overall! I went online and read the following report released today on realestateweb - check it out "Scary picture of SA property market".
Feels and looks like we're heading for a home loan/bond crunch here in SA 'cause of all the folks who have also collapsed/consolidated a great deal of their debt into their mortgages...assuming their properties would always appreciate. Exactly as what has happened and is happening in the USA.
Did some more reading and found this company online - GOHUD.COM - their idea is smart and capitalizes (excuse the pun) well on the situation.
Here's how it works; HUD Homes are an interesting opportunity for home buyers, and also investors, who want to purchase a home in almost any state across the USA. A "Hud Home" is one that is being sold by the Department of Housing and Urban Development. When someone with an FHA-insured mortgage can’t make the payments, the lender forecloses on the home and HUD takes ownership. It is then offered for sale at market value, based on a recent AS-IS appraisal, meaning, the market value in its current condition. Obviously with the current financial market, the number of available HUD properties has doubled over the last 6 months, and some states have thousands of available properties.
HUD properties are made available in a variety of ways, with an emphasis on “Owner Occupied” purchases that include the “Good Neighbor Next Door” buying opportunities for “Law enforcement officers, pre-Kindergarten through 12th grade teachers and firefighters/emergency medical technicians.” This last group of individuals can get incredible discounts on the purchase of a HUD property. The prices on HUD Homes tend to be very price competitive in the areas where they are located, and each will have an associated Property Condition Report.
When watching the prices on the homes, you might notice a common pattern as a particular home stays on the market. The home will be listed, and be available to “Owner Occupants” … meaning that you must live in the home as your primary residence if you purchase it. If the home is not sold in a week or so, then the status will change to “All Bidders” … meaning that anyone can now bid to purchase the property for any purpose. If the home still does not sell, it is common that the price will then be reduced by a full 10%, and the status will return to “Owner Occupants” again. This process will repeat until the home sells. Owner occupant, all bidders, price reduction … and on and on.
Like I said...smart...and a potential reverse auctioning opportunity here in SA? Maybe across the entire debt spectrum?