IS THE FLORIDA REAL ESTATE MARKET RECOVERING?-You bet it is. By St. Cloud Realtor, Allison Stewart
I recently received an email from a friend asking if the Real Estate Market is really recovering. It has a snazzy Google Map which showed foreclosures int he hardest hit areas. Orlando for instance was 1 in 14 homes. IT LOOKS DRAMATIC- A SPLASH OF RED DOTS EVERYWHERE…BUT LET’S LOOK CLOSER- as a leading realtor in St. Cloud Florida, I study the market and what it is doing daily. I have seen consistent gains being made for more than six consecutive months. Not huge jumps, more a slow steady increase in sale and slight rise in the median price of homes for sale in St. Cloud Florida.
I noticed under Orlando- it covers Orange, Osceola , and a bit of Polk County as well.
Note this also includes TIME SHARES – remember them? They technically fall under foreclosure status because a buyer is issued a deed with their shares. So 1 Unit can technically default 52 times (by 52 separate owners) This puffs the numbers, but is valid.
Strategic Defaults: from Investors, Foreign Owners, and Domestic Investors particularly in the Orlando Area including Osceola County; have added to the numbers as well. Remember the boom attracted speculators like a moth to a flame. The overpriced investments were among the first to tank when the market soured. Homes in Harmony Florida is an excellent example of this 44% of the homes are in receivership. $300-400,000 dollar homes sold in 2005-2007 are now selling for $129,000-149,000.
PREVIOUSLY FORECLOSED PROPERTIES:
Bank of America is currently holding a FIVE year inventory of foreclosed homes. (This came directly from Bank of America sources) Wells Fargo, is seeking deficiency judgements on borrowers who default. So they not only will take your home; they will slap a judgement on you for the unpaid balance if you try an sell short sale. This is a double whammy to your credit. The deficiency judgement can sit and collect dust in the court house records indefinitely but could prevent you from getting a loan in the future until it is paid.
DOES NOT stave off foreclosure- it halts the process until the debts are discharged-then the foreclosure moves forward. Because Florida is a judicial state; the current backlog of pending foreclosures is just over 400 days from the date of filing. During this time they do have the option of applying for a short sale to avoid foreclosure. Distressed homeowners, can remain in their for over a year (not pay their mortgage) by the time the foreclosure gets in front of the judge. And many are.
Here is another little ditty: HOA’s are also filing foreclosure notices on delinquent homeowners! Nice huh? They have attorneys who have successfully foreclosed for non payment of dues. This is particularly dangerous for homeowners who have paid off their homes.
SHIFTING FROM A TRADITIONAL SALE TO A DISTRESS SALE FOR THOSE HANGING ON BY A THREAD
There are rare cases where the homeowner has accumulated equity ( from homes purchased 12-15 years or more ago)-then suffered a hardship (like the loss of a job) when they become delinquent; The home owner lists the house and gets an offer- the bank enforces the “Accelleration Clause” which is found in every mortgage under the default terms. This escalates fees, penalties, and interest at a rate which makes it impossible for the home owner to remain liquid. As such if they fail to close by the bank deadline, the banks will not rescind the fees to close; they will instead offer the option of becoming a short sale.
A Notice or filing is not necessarily a foreclosure. Although it is recorded that way- it is not a foreclosure until it goes before the judge. SO the numbers are skewed somewhat by the “Notices” which are intent to foreclosure and not actual foreclosures.
Also noteworthy are the changes in Short Sales ( where the home owners owes more than the home is worth) The foreclosure crisis was fueled by lenders NOT accepting short sales and refusing to work with distressed home owners, taking as long as 6 months to accept an offer, or waiting 6 months to reject the offer and moving forward on foreclosure- until December 28, 2010 when the Home Affordable Foreclosure Act- (HAFA) was signed into law.
Under HAFA- homeowners have a 30 day response from the lender required. Relocation incentives up to $6000 for junior lien holders Property can be vacant or rented for up to 12 months
Did you know… Chase Bank is offering Short Sale applicants an additional incentive- I have one borrower who is eligible for $10,000 at closing IF he sells his house. He would have also received an additional $3000 if he still lived there under HAFA guidelines. The banks figured out that flooding the market with foreclosures only drove the prices down.
So they have restricted releasing foreclosed homes while tightening lending requirements for new borrowers. Cash buyers are having a field day. Foreclosures also known as REO (Real Estate Owned) homes are being held in “Shadow Inventory” by lenders in hopes of recovering more of the lost investment. They have, in most cases already collected from Mortgage Insurance companies which helped them by insuring as much as 25% of the lost investment. They too must sign off on a short sale as well as the bank Investors which include Fannie and Freddie.
So what does this all mean?- it means that investors, second home owners, first time home homes and Veterans wanting to use their GI Bill have an opportunity here to get a home at historically low prices. Interest rates are also at historic lows.
In St. Cloud, prices have reverted back to the early 1990′s. Making them very attractive investments as rentals, and first time home buyers.
The average price is $122,000 in St. Cloud, Florida at the moment. And yes, sales are being achieved. Buyers are looking to take advantage of the favorable conditions, lower interest rates, and good supply of homes know that by buying now- they have a hedge against inflation and and edge over devaluation of the dollar concurrently.
Food for thought….
Homes & Land, LLC,. A local St Cloud Florida Real Estate Brokerage.
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Phone: 407-545-8002 | Email: Allison@Kissimmee-stcloudflhomes.com