Best Beach Towns for Foreclosure Bargains
BOSTON (MainStreet) -- The U.S. foreclosure crisis has cast a cloud over parts of Florida, California and other sunny locales, but a study shows there's big silver lining: cut-rate home prices in some beachfront communities.
"It's a good time to buy foreclosures in beachfront communities, because prices are so low in many locations compared to where they've been in the past," says Daren Blomquist of RealtyTrac, which recently compiled a list of "Best Beach Towns for Foreclosure Bargains."
RealtyTrac studied beach communities around the country to find those where "distressed" properties -- short sales, bank-owned homes and the like -- sold for the biggest discounts during the first quarter compared with what nondistressed properties fetched. All communities that made the list had at least 100 distressed-property sales during the quarter.
Blomquist says he's not surprised plenty of beachfront communities have lots of distressed properties; high-end homes represent the foreclosure market's fastest-growing segment.RealtyTrac found that 10,046 $2 million-and-up distressed homes sold in America last year -- a 764% increase from 2007. "What that indicates is some homeowners who may have been better off or able to forestall foreclosure for a period of time eventually got sucked into [the crisis] as the bad U.S. economy continued," Blomquist says. The expert also thinks some beachfront homes have fallen into foreclosure because of so-called "strategic defaults." That's when a homeowner has the money to keep paying mortgage bills, but decides not to because the property's value has dropped below the loan's unpaid balance. Regardless of why a property goes into foreclosure, Blomquist recommends exercising caution when buying one in a beachfront town. After all, many distressed properties fall into disrepair before the bank seizes them. "You don't want to buy a beachfront foreclosure sight unseen -- a mistake many investors make," Blomquist says. "Even though the property might be far from your home, you want to either go there yourself or have someone you trust check it out before you buy." Here's a look at the five communities that top RealtyTrac's "Best Beach Towns for Foreclosure Bargains" study:
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