Short Sales still a threat to home values.

773447 — Sun, 24 Jul 2011 19:41:00 GMT

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.

Is it really a Home Buyers Market? That depends...

773447 — Tue, 17 May 2011 23:02:00 GMT

The collapse of the real estate market in Tampa Bay has convinced almost all home buyers that they can find great deals. They are certain it’s a “Buyers Market” and in some ways and in some places it truly is. Prices are low, interest rates are extremely low, there are foreclosures available, and if you don’t mind waiting 4 to 6 months to get an approval on a short sale, you can get a pretty good deal.

But what if you want to live in a specific neighborhood or have certain criteria for the house you want to purchase? What if you don’t want to make an offer on a short sale and wait months and sometimes years to get a response from the bank? What if you don’t want to purchase a foreclosure because of the repairs needed to bring the house back to livable condition? What if there are few or no short sales or foreclosures in the neighborhoods you like?

For these buyers, the options can become very limited and they find out very quickly that it’s NOT a buyers market for them.

Don’t get me wrong, the prices in these neighborhoods have fallen just like the rest of the country. The problem is that even if the owner has the home priced at current market value, the buyer still feels that they should negotiate. Imagine their shock when seller after seller shoots down there low offer. It surprises them that not all home owners are desperate to sell and if they happen to own a home in a desired neighborhood where home inventory is limited, there’s no reason to take less than what the current market value is.

This is happening more and more often in the Tampa real estate market and the buyers are getting frustrated. The media reports of record foreclosures and desperate sellers has them thinking that every home seller is going to agree to take a really low offer so that they, the buyer, can get a fantastic deal.

A quick analysis of a few popular areas around Tampa Bay paints a very clear picture that buyers need to see:

There are 43 homes for sale in Carrollwood Village, 2 of which are foreclosures.

There are 85 homes for sale in Tampa Palms-number that are foreclosures, 3.

There are 183 waterfront homes for sale in South St. Petersburg. 2 of those are foreclosures.

Do you see the picture?

My advice to home buyers is to analyze the inventory of homes that are available in the neighborhoods they want to live in. Check what has sold recently. If you can’t steal a home in those neighborhoods and that is your goal, then adjust your criteria.

But if you have to have that certain home in that specific neighborhood, you may have to adjust your thinking. There are a lot of foreclosures and short sales in Tampa and surrounding communities, but there may be very few in the area you want to live.

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Short Sales still a threat to home values.

Is it really a Home Buyers Market? That depends...