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Million-dollar homes aren’t escaping foreclosure, or the hefty price discounts that often come with it.
The number of homes in foreclosure that have mortgages that are $1 million or higher are nearly twice as high now as they were in 2007, representing about 2.3 percent of all homes in foreclosures, according to RealtyTrac.
“We’re seeing evidence in our data that the high-end market is starting to get hit more,” says Daren Blomquist of RealtyTrac.com. “I think high-end home owners have a little more ‘padding’ to get through tough times if they experience a job loss or other trouble. But as the tough times continue, more and more of these home owners are succumbing to foreclosure.”
And the discounts on these million-dollar foreclosures can be steep. For example, an oceanside home in La Jolla, Calif., in foreclosure is selling for $25 million but will go up for auction on Sept. 28 — with the bidding starting at $16 million. Another foreclosed estate in Laguna Beach, Calif., just had a $1.95 million price reduction, with a new list price of $18 million originally the home was in escrow for $28 million in 2009 when it was under construction.
Pricey Homes Go to Auction
More high-end listings are finding their way onto the auction blocks in recent months. Not all are foreclosures, however, but some of these high-end homes come from highly motivated sellers who are tired of their homes lingering on the market.
For example, a seven-bedroom home on Mercer Island, Wash., will soon go up for auction after the seller has been unable to sell his home since 2009 first listing it at $32 million; then $28.8 million last year. Another property in Malibu, Calif., originally listed at $65 million, will also soon go up for auction with a minimum bid at $22 million — reportedly making it the highest-priced home ever to go up to auction.
Some sellers are accepting price cuts at auctions 50 percent off — or even more — just to have the peace of mind of a quick sale.
SOURCE: Realtor Magazine – Daily Real Estate News
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