In Illinois, where consolidation in the banking sector has been considerable, lenders are dealing with a large inventory of foreclosed homes acquired from target banks, which they are eager to get rid of.
Diana Peterson, executive vice president at Auctions by ATG, which offers commercial and residential properties through live and online auction platforms, says institutional investors are looking to do really big deals often at a 25% to 30% discount to market value.
Her company encourages individual investors who are interested in cherry picking properties to participate in a pre-auction bidding process or risk losing it to a bulk investor. "I keep hearing people at cocktail parties talk about this great ski-resort they saw in Utah and how they kept following it and following it and suddenly it went off the market," says Peterson.
Big investors looking to do bulk deals are not cherry picking. They hope the number of good properties would offset a few bad ones. "The local mom and pop investor does not have the ability to make a mistake on a large scale," says Workman.Still, all the bulk buying is lifting the prices at the bottom of the market. Whether it is sustainable, no one knows. "It is an election year," says Marge Peck bitterly. "The holidays are coming. Everyone just wants to hear good news." -- Written by Shanthi Bharatwaj in New York.
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