You forgot the incentives for the seller. A home sale is likely the biggest transaction that most people are ever involved in. A traditional seller is more likely to hold off for the right buyer or price. For a bank, it is just one of many transactions. They are less likely to hold out for a specific price and will be happy to sell for 90 cents on the dollar to simply move on to the next transaction.
>I don't think the statement you're quoting is correct, however, they do tend to have a lower value.
I am curious why you say that quoted section was incorrect when you seem to agree that the value of foreclosed homes is lower.
I thought "naturally have a lower value" implied that there is something about foreclosure itself that reduces the value of a home. I don't think this is true. Rather, I think that foreclosure is covariant with things that reduce the value of homes. So I wanted to clarify that point. That's what I meant by disagreeing with the quoted statement.
Ok, I guess that is just a question of semantics. I likely could have phrased it better but the underlying point still stands that an increase in foreclosed homes will lower the overall home value in an area for the reasons we both listed.
>I don't think the statement you're quoting is correct, however, they do tend to have a lower value.
I am curious why you say that quoted section was incorrect when you seem to agree that the value of foreclosed homes is lower.