Foreclosures and preforeclosures made up a large part of homes selling in the Fox Valley area of Illinois last month. In addition the number of homes on the market continues to decline. Both of these trends bode well for the housing industry, although “complete” recovery is probably still many months away.

The percentage of homes that are bank owned (foreclosed) or on the verge of (short sales) made up nearly 50% of the homes actually selling last month. If you break the homes for sale into price ranges, the number of homes under $200,000 that sold and were distressed (foreclosed, or preforeclosed) is much more than 70%. I calculated 77% of single family homes under contract (in the Fox Valley area) being distressed properties in a quick survey of the MLS. “Traditional” sellers just cannot compete with the banks on the price line. And, although this is extremely anecdotal, I have witnessed the quality of home go up among the distressed properties. Nearly 72% of the transactions I have been involved in have been first time buyers, and most of those homes fell into this under $200,000 price category. In touring with these buyers, there have been more and more homes in “move in” condition. Many with nothing to do but paint walls, clean carpets and cut the grass. Again, that has made it tough on Mr and Mrs Seller, who just want to move.

This market still brings amazing opportunity to the traditional seller who can sell and leave with money in their pockets to buy in the next price range up. Because so much of the activity this year has been in the lower price ranges, with much fewer sales as you move up the property ladder, the discounts in the higher price ranges are bigger not only in dollars, but in percentage too. If you have been in your current home more than 7 years, or have a good equity position, you may never see a better opportunity to get your “dream home” Interest rates are still great, and in the higher price ranges, the bargains are incredible.