Is There A Conspiracy To Control Distressed Property?

It appears that the surge of distressed property that entered the market in August of last year will be replicated in 2014, as the short-term trend of short sale and foreclosure listings is moving higher.

A conspiracy theorist might conclude that the large lenders holding the most distressed property inventory have withheld the bulk of their REO assets during the peak summer months in order to help real estate values recover, but I suspect they aren’t that organized.

Take a look at the again-changing landscape for homebuyers and sellers alike, as more than 1 in every 5 new listings in the Tallahassee MLS is being marketed as “distressed.”

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How Fewer Short Sale Listings Might Be Contributing To Slowing Market

Weekly Real Estate Report 231x300 How Fewer Short Sale Listings Might Be Contributing To Slowing Market, Tallahassee Real EstateThere were nearly 600 closed distressed home sales in Tallahassee through July, the most on record through July of any year for which I have records (24 years).

Of the 598 closed distressed sales, 77 were recorded as short sales, meaning  1 in every 8 distressed sales is a short sale. Considering that the ratio has been above 1 in every 3 distressed sales over the previous four years, we can definitely conclude that the short sale is no longer the solution of choice for troubled homeowners.

Unfortunately, fewer sellers choosing to sell short is creating a different problem that we had not anticipated.

Read this week’s special report to find out about the “catch-22″ scenario that has occurred as the short sale option sees fewer sellers.

Which Tallahassee Subdivisions Should Expect The Most Foreclosures

In case you missed the announcement this weekend, we just released our foreclosure reports for the month of June.

During the process of compiling all of the lis pendens filings for the report, I felt it would be a good time to create a graph showing the Tallahassee subdivisions where we should expect to find the most foreclosures in the coming year.

While many of the “usual suspects” are listed, there were a few surprises as well.

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Distressed Home Sales Remain Steady

There is an interesting conflict developing for distressed home sales in Tallahassee. We are seeing roughly 30% of the homes selling each month come from short sales, foreclosures and bank owned properties, yet there are very few distressed listings entering the market.

That means buyers are flocking to a smaller pool of these below market properties, and we will soon see some changes occurring in what is closing.

Perhaps the big dip in buyer activity this summer can be blamed on the fewer offerings from short sale sellers.

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Is It Too Late To Short Sale Your Home?

There have been 57 short sale closings in Tallahassee through May 2014, down 59% from the 140 closed through May in 2013.

Before you start getting excited thinking that were are seeing an end to the plethora of distressed property sales in Tallahassee, you should also know that there have been 315 “other” types of distressed sales thus far in 2014, up 40% from the 225 closed through this time last year.

So we have to wonder, are we right in the middle of the real estate recovery, or have we begun moving towards the end game?

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How To Buy A Home In Pre-Foreclosure

Many of the large real estate sites are now offering information for each home in pre-foreclosure, and this confuses a lot of homebuyers.

In case you haven’t heard the term before, it merely means all the homes that have been served foreclosure papers (lis pendens) but the bank has not yet taken back the home. Of course, many of these are already being actively marketed as short sales, but there are those properties where the owner does not want to sell or has not decided to market the home for some reason.

It is these elusive pre-foreclosure properties that are frustrating buyers looking for a great deal in the Tallahassee real estate market. So how does one go about seeing them?

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Distressed Home Sales Pressure Home Values In Harbinwood Estates

Located just to the south of Lake Jackson, one can find perennially popular Harbinwood Estates, with roughly 250 homes that have been consistent performers among the top selling neighborhoods in the Tallahassee real estate market.

While not producing high sales numbers like the top 5 subdivisions (SouthwoodGolden Eagle PlantationKillearn Estates, Killearn Lakes Plantation and Bull Run), Harbinwood Estates does see enough home sales to often times drop into the top 40 most active neighborhoods in the Tallahassee MLS.

Thus far in 2014, Harbinwood Estates ranks tied for #11 based upon 5 home sales with an average sales price of $194,900 and a value of $73 per square foot.

Does that means you are getting a 2,676 square foot home for just under $195K right next to popular Lake Jackson?

Currently, there are 4 homes for sale in Harbinwood Estates, 2 of which are already under contract.

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Changing Times For Short Sales And Foreclosures In Tallahassee

Times and trends are changing for the short sales and foreclosures in Tallahassee.

What we often refer to as “distressed properties,” we have seen a new industry within an industry arrive, dominate, and now recede, all in the past 7 years.

The percentage of distressed properties in Tallahassee that are being sold as short sales is nothing like we have seen in the past, but you might be surprised how  this change has impacted the liquidation of these non-performing loans.

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February Report On Southwood Homes For Sale

Of all the property searches performed on the Tallahassee Real Estate Website, Southwood homes for sale tops the list.

Maybe it’s because we have written so many market reports on Southwood, or maybe it’s because the searches are fast and can be automated for routine updates, regardless we will continue to provide the most accurate, up to date information on the Southwood housing market.

This month’s home sales report for Southwood shows continued improvement for home values which are up roughly 10% since this time last year.

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Distressed Homes Are Not Going Away In 2014

Yes, the market is getting stronger every day, but that does not mean that we have seen the last of the distressed homes.

From coast to coast, I am seeing reports about short sales and foreclosures still being very prominent in the market, and that is very true still in the Tallahassee real estate market.

With roughly 30% of all home sales reported as non-arms-length, these problem properties will continue to impact home prices and home values throughout the 2014 selling year.

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