Brevard County Market Watch Issue 10
The National Association of Realtors has indicated that if sales remain at the current pace, this year home sales may surpass last year's mark of a total of 4.9 million, at an annualized rate.
We have seen a dent in the number of foreclosed properties on the market. The current projection is that the US could be down to an 8 month supply of homes on the market by December. Since real estate is local in nature there will be variations in this number in different parts of the country.
California, Florida, Michigan, Arizona, Nevada and Illinois comprise 60% of all foreclosure filings. There are currently 1.5 million houses in the US in foreclosure. In August 2009, California had the largest number of foreclosures at 14,590, with Florida trailing at 6,446. Currently, 1 in every 140 households is in foreclosure in Florida.
We have heard that there are 3.5 million foreclosures that banks have not put on the market for sale yet. Is this true? If it is, is this an accurate number? When these go on the market, it could create a ripple effect for homeowners across the US. It may cause home values to fall. It is estimated that for every one house in your neighborhood in foreclosure, your home value drops by 1%. So, 2 houses would be 2% and so on. Are these properties purposefully being held back, so as not to flood the market, and pull values down? Or, are the banks buried under piles of paperwork?
We’ve also heard that some banks are dragging their feet in pushing nonpaying owners out of their homes. With these people in place, these homes remain occupied and hopefully, maintained. Some projections are that the banks don’t want anymore REO’s on their books. It is estimated that a bank owned property costs the lender up to $400 a day. Some banks are hoping that the delinquent sellers will be able to catch up on their payments, modify their loans or short sale their property. And, some owners are opting for the short sale, with their lender’s approval. A short sale is when the bank agrees to take less for the home then the current mortgage balance. Some reports are indicating that one half of short sales are making it to closing.
Other owners, not behind on their payments, tell us they are waiting to put their house up for sale until the market improves. Until it improves how much? The market must hit bottom before it can rebound. When will that be? This can be a double edged sword. You sell high, you buy high. You sell low, you buy low. The ideal scenario is that you find a happy balance, somewhere in the middle.
On November 30 the $8000 first time homebuyer tax credit expires. There are rumors of a new tax credit taking its place. We’ll see. Houses under $120,000, in good condition are receiving multiple offers. First time homebuyers, out of area buyers and international buyers are picking up these deals. They are often selling for higher than asking price to anxious investors outbidding winning the highest bid with cash. So, there are segments of the market where houses are selling briskly. So, where do we go from here?
Sandy Shores, REALTOR® M & M Real Estate Inc. 321-253-4545 www.SandyShoresMelbourne.com