Is this good? Is this bad?

Depends on who you are. If you are a trustee sale buyer and have no friends and people skills (talk to a few of them, you will quickly see what I mean) you have to love the new market. In Santa Clara and Orange Counties the pirates are buying everything in site. Some are even paying, what in my opinion, is more than current market value.

If you are a REO buyer and love spreadsheets and telephones, you can see the end of your easy gravy train. Its time to learn new skills and test new waters. Our information service and web-site get more requests for REO data than any other type. As experience teaches, if the public is flocking it is the wrong place to be.

If you are a good ol'default buyer and love talking and dealing (sorry if this sounds more romantic than the other two types of buyers, but I think it is) your time has come. Keep doing the fundamentals and you will talk to more qualified sellers. Do a good job of negotiating and you will do a lot of deals in the coming years.

If you do all three and love juggling your business, your tenacity and hard work will continue to pay for you. Just don't lose focus on the big picture.

The reduction in new foreclosures should not scare you. Based solely on the numbers from Daily Default Infoservice, more people make money buying distressed real estate in good markets, when the number of foreclosures are low. There is only one reason this is true  it is harder to make mistakes.

I used to be in collections, clients would often remark that the bad economy must be good for my business. Actually, we would get more bills to collect, but we couldn't collect them. A good economy gave us less bills, but they were collectable. We made more when the economy was good. Foreclosures are the same way.

We have muddled through unprecedented volumes of notices in the last seven years. Each year the numbers got higher and higher. Each year less and less good deals were closed. Finding good deals was like shooting ducks after they all flew south. Now recordings are dropping  we are back to 1993 levels  and more and more of my students have smiles. I may be a better teacher now. But more than likely, it is just easier to make a profit now.

We taught for years to buy at only 50% - 60% of resale value. 10% - 20% of the discount required was for the cost of holding and the risk of a declining market. The deals were out there and people made money  the ones that worked the whole market at least.

Times are easier now. Members of Foreclosures.com's California Investor Network tell me they no longer need such heavily discounted deals. They are willing to fund deals up to 80% of value if the right conditions exist. Times, they are a changin'. (However, I can tell you that you won't see me funding those deals.)

So, if you've been thinking about trying your hand at buying property for fun and profit what are you waiting for? If you bought property in Santa Clara County in 1997 you know what I am talking about, you would have already made your first homerun.