Q: I've been hearing that there have been some foreclosures on Vashon.

I’ve read about foreclosures happening in other parts of the country but I thought that with our good real estate market, it wouldn’t happen here. Does that mean there will be some real bargains now?
A: We have a good market, but that doesn’t help if folks owe more on their home than it’s worth when they need to sell. Far too many people have been enticed by lenders to refinance and borrow more than 100% of the value of their home. In addition, many people who have purchased homes in the last few years got stuck with a type of adjustable rate mortgage that adjusted upward several times, very quickly, making their payments too high to keep up with. People with poor credit scores, or those that fall prey to predatory lenders, can easily get stuck with this type of mortgage.
There are situations where people may lose their job, have a devastating illness, or a divorce; all of which could have put them in a financial bind. That can cause a family to lose their home through foreclosure. When those houses are put on the market, they should be priced to sell fast in the hope that the seller can beat the foreclosure and retain some credit-worthiness.
As for bargains, I rarely see anything that looks like a real bargain here. What I am seeing is a slow down in the huge price increases we’ve seen for many years. Many listing agents are getting the message that prices are not going up as quickly as in past years, so they are pricing homes accordingly. Those well-priced homes are selling quickly.
However, many over-priced homes are sitting on the market longer and going through price drops before they sell. That can be demoralizing to a seller and can make them feel that they are losing money, when in fact, proper pricing in the first place would have seen a quick sale and they could have moved on with their life.