FORECLOSURES ARE DOWN…..FOR NOW…
Brendan McLaughlin reports on a deceiving statistic reported recently from Tampa. In January there was a downward trend in foreclosures in the Tampa area. This is deceiving in that many lenders instituted foreclosure moratoriums during this period of time. In addition, banks are holding a tremendous number of foreclosed homes in their inventory (i.e. they have not been put on the market).
You may say, “So what?” The “what” is that as these foreclosed properties are released for sale, they will be released at depressed prices. Depressed prices while lower the market value of existing homes. Lowered market value will lead to decreased property value which will eventually lead to increased short sales and/or foreclosures.
I would suggest that this scenario is playing out throughout the US.
Home foreclosures are down
, but people are still struggling to make their mortgage payments
Bank owned homes still pile up
S, foreclosures are rampant. But Florida and the Bay Area saw a sharp drop in new foreclosure filings by banks in January. It sounds like good news…until you talk to the experts.
Eddie Serralles is a jack-of-all real estate trades. He’s a real estate broker and agent, a mortgage broker and a general contractor working mostly in Ybor city and Tampa Heights.
“When I came to this market 20 years ago, there were so many abandoned homes and homes sitting vacant. It was a depressed market. It wasn’t good at all,” remembered Serralles. And he says it may be worse today, in part because banks are so slow to sell homes that are in foreclosure.
“The price keeps dropping, we keep on submitting offers and deals keep falling through and we keep making more offers and trying to cooperate with the lender. By the time they accept the deal, the buyer’s already gone and found another piece of property”.
Florida is one of five states along with California, Texas, Arizona and Michigan that accounted for more than half the foreclosures last month.
A new report shows the number of foreclosures in the Tampa Bay Area dropping by ten percent, but real estate consultant Peter K. Murphy of Home Encounter in Tampa believes that’s a temporary blip.
“We know for a fact that we have about eight months of foreclosure inventory on the market right now, but when you drive down the street and see a little sticker on someone’s window and no ‘for sale’ sign on the yard, that’s a property the bank is holding on to and not selling yet. And those are all over town,” said Murphy.
Banks are holding on to those properties because they don’t want to flood the market and drive prices down even more sharply. Experts expect a slow, gradual return to normalcy lasting four or five years.
But until then, there’s opportunity.
“When you can buy a piece of foreclosure real estate for a 53 percent discount from what a regular property sells for that’s an opportunity that every one of us should jump on board” said Murphy.