Many articles have been floated around recently reporting that the Tampa
real estate market is stabilizing and that home prices may begin to rise in the
near future. But according to a survey conducted by Movoto.com, there could be another
drop in home prices if changes are not made to the short sale process.
Over 49% of the real estate agents
asked said that the majority of homes listed in their market are short sales. Approximately 20% of the agents said their
short sales are not closing because the banks and buyers cannot come to terms
before the home goes into foreclosure. The company says that the combination of
more short sales and greater foreclosures is going to lead to another drop in
home prices.
Fortunately, the Tampa Bay
market is not quite as bad as some of the markets surveyed. Still, there are
plenty of short sales available in the area. Nearly 25% of the homes for sale
in Tampa, St. Petersburg,
Clearwater, and
the surrounding communities are listed as short sales. Short sales also
represent nearly sixty percent of the homes that are currently showing as Pending
or Under Contract in the Tampa MLS.
Because of this volume of short sales
and an expected increase in foreclosures, some are speculating that fewer
offers will be made on existing short sales listings because they are so
difficult to close. They in turn will end up in foreclosure, be sold at a
discounted price, and further devalue the neighborhoods they are in.
The theory is plausible given the fact
that over the past year, the number of shorts sales showing as pending in the
MLS in our area on a month to month basis averaged nearly 55% of all homes
under contract. ONLY 9% of those homes actually closed. The rest are either
still being negotiated or have gone to foreclosure. That is not a good sign at
all.
The survey specifically said that markets
like Florida and Las Vegas could take even longer for home
prices to stabilize because of the lack of success in closing short sales.
It currently takes about a year and a
half for foreclosures to go from notice of default to a bank owned . A full recovery could be made much faster if
the banks would move homes through the short sale process in a timely fashion.
It would eliminate a quarter of the existing inventory of homes, keep
foreclosures from flooding the market, and give people who are not in a
distressed situation the opportunity to sell their property without have to
compete with the unusually low prices offered by owners who short sell their
property.