Foreclosures are cheap, right!
Generally, yes. The median foreclosure price in the Fort Hood area is nearly $40,000 under the median home sale price.
However the cheapest homes on the market are not foreclosures.
Why? Foreclosed homes are only those that had a mortgage on it. Most lenders will only lend above a certain amount – usually between $40,000 to $60,000. So most homes with a mortgage were at least worth $40,000 at some point recently. Non-foreclosed home – not necessarily.
The cheapest non-foreclosure for sale as of this writing is asking $25,000. It’s cozy one bed, one bath, 580 sq. ft. detached home in Lampasas.
The cheapest home to sell in 2016 on the MLS went for $8000 in Gatesville (versus the cheapest foreclosure, which was $15,200). 7 non-foreclosures sold at or under $20,000 on the MLS in 2016.
VIEW CHEAPEST NON-FORECLOSURS HOMES FOR SALECharacteristics of the Bottom 10% of Homes
The bottom 10% of Fort Hood area resale home sales (aka not builders, not foreclosures) sold at or under $65,000 in 2016.
The bottom 10% of homes tend to be small – half the size of the rest of the 90%. And old. The top 90% of homes are 12 years old on average. Those selling in the bottom 10% are 52 years old on average. They are indeed concentrated in the older areas around Fort Hood – Downtown Killeen (76541 Zip Code), Lampasas, Gatesville, and Downtown Copperas Cove have a disproportionate number of the area’s cheaper homes.
| Price Drop | Drop % | Days to Contract | Sq. Ft. | Year Built | ||
|---|---|---|---|---|---|---|
| Bottom 10% | $5000 | 8.9% | 45 | 1116 | 1965 | |
| Top 90% | $4000 | 2.4% | 42 | 2046 | 2005 |
Interestingly, homes listed in the bottom 10% often endure a larger price drop than the more expensive homes, not only in terms of percentage (which would be expected) but total price drop.
| VA | FHA | Conventional | Cash | |
|---|---|---|---|---|
| Bottom 10% | 11% | 12% | 20% | 58% |
| Top 90% | 59% | 16% | 16% | 9% |
Unsurprisingly, the VA loan is very popular in our area, comprising 59% of all loans made in the top 90% of homes. But again, lenders can’t loan on amounts under $40,000 to $60,000. So also unsurprisingly, most of the deals done in the bottom 10% of the Fort Hood market are cash.
Some of these buyers are also investors, looking for the cheapest homes to purchase, repair if necessary, and often then rent out or sell with owner financing.
VIEW CHEAPEST NON-FORECLOSURS HOMES FOR SALE