Brevard County Market Watch 11

Here we are, at the end of yet, another busy year.  I had always heard that the older you get, the faster that time passes.  Well, that has certainly been the case this year.

2009 has proven to be a roller coaster ride in so many aspects of people’s lives.  The same is true in Brevard’s real estate market.  At the beginning of the year the question was, “Has the market hit bottom, yet?”  Responses were varied.  Many were convinced that the market was at the bottom and was on its way back up again.  Others scoffed at this notion, noting that there was too much unsold inventory just sitting.

Today, in some parts of Brevard over 50% of homes are being offered for short sale, owners trying to beat foreclosure.  A short sale seller asks their lender to accept less for their house (usually today’s market value) than their outstanding mortgage balance.  Some lenders are accommodating, yet others are impossible.  Short sale mitigators are backlogged, with mountains of files on their desks, filled with homeowner’s pleas to help get them out from under a house they can no longer afford.  Short sales are reviewed on a case by case basis. The transactions are complex and can take months to close.  Repair items that turn up on a home or termite inspection can create havoc in the transaction.  Most lenders won’t agree to repairs.  So, the transaction is dead. Or, short sale lenders can overvalue the property, thus causing an appraisal problem for a buyer.  There are so many factors involved in a short sale. It the deal dies, the property goes back on the market, in hopes of another buyer. Or, the house eventually slips into foreclosure. 

The government is trying to streamline the short sale process, and they are requiring lenders to try loan modifications before a short sale.  Many lenders are not receptive.  Fannie Mae has come up with a leaseback program to allow owners to stay in their homes, by paying fair market rent.  Few owners have jumped on board with either program. 

Florida is on the top 5 list of high stress states, due to the current housing meltdown, according to a UCF study.  Nevada, Michigan, California and Arizona also made the list.  Approximately 1 in 5 owners, upside down, are walking away from their properties, even when they aren’t behind on payments.  Why pay, when there’s no equity?  And, owners that are behind are opting to sign over their deed to their lender, in lieu of foreclosure.  Fannie Mae is hoping to sell these houses for a profit.  Not likely. The American taxpayer may be footing the bill for these empty properties.

The wave of foreclosures has overburdened lenders, the county clerks offices and judges.  In October 2009, about 17 percent of the more than 3 million mortgages in Florida were in some phase of the foreclosure process.  It used to take 3 to 5 months, and now foreclosures are taking more than a year or two from initial filing to final judgment and auction.  The problems stem from lack of manpower and a lack of communication with the parties involved in the process.  The greatest deterrent is that only 2 Florida law firms handle over 60% of all of Florida foreclosures!

The good news is that the Melbourne Association of Realtors indicates that homes are selling quickly in the under $200,000 price range.  In some areas there is now a shortage of good, clean, affordable homes for buyers to choose from.  Many of the foreclosures and some short sales are in a state of disrepair, whereby FHA and VA lenders will not agree to finance these properties.  Pending home sales have increased for 9 consecutive months.  First time homebuyers, investors, out of town and international buyers are in bidding wars for clean, properly priced homes up to $150,000.  However, there are fewer interested buyers for higher priced properties. Homes priced $500,000 to $1,000,000 are sitting stagnant.

The New Year is just around the corner, and I know that so many are hoping for a promising 2010.  2009 has been a year to test our faith, determination and our strength, in so many different aspects of our lives.  It has been a year to reach out to those that are the most important to us and to lend a helping hand.  And, you know the old saying, “what doesn’t kill you, makes you stronger.”  I hope that next year proves to be full of hope, love and prosperity for you and your family. And, remember that the most important thing we have in our lives are the ones that we love.  

So, take care and bless you. 

 Thank you for all of the joy, laughter and hope you have brought into my life.

I wish you all the best of everything in 2010.   

    Sandy Shores  REALTOR ®    M & M Real Estate  321-253-4545