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Shadow Inventory Hurts Housing Rebound

Feb 17th, 2011
by David J. Cohen.
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300px I 195 Miami eastbound Shadow Inventory Hurts Housing Rebound

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According to an analysis by Standard & Poor’s, it will take an average of 49 months to clear the nation’s supply of homes that are in some stage of foreclosure.

The 49-months forecast is up 40% from a year ago. These properties are referred to as “shadow inventory” because they ultimately will go on the market even though they’re not currently listed for sale. This shadow inventory is seen as one of the larger obstacles to a rebound in home values because lenders are likely to re-sell these properties at deep discounts.

In the Miami metro area, which has $57.8 billion worth of shadow inventory, S&P estimates it will take 60 months — five years — to work through these distressed homes. On the bright side, the 60 months is unchanged from the third quarter of 2010 and a year ago.

Miami is the only one of the top 20 metro areas surveyed that didn’t see an increase compared with the third quarter and a year ago.

Shadow Inventory Hurts Housing Rebound

42% of Broward Home Sales are in Some Stage of Foreclosure

Dec 6th, 2010
by admin.
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Analysts predict that homes in some stage of foreclosure accounted for a large portion of South Florida sales during the third quarter, a trend that likely will hinder the housing market indefinitely.

According to RealtyTrac Inc., about 42% of Broward County homes sold during the July-through-September period were in default, scheduled for auction or bank-owned.

In Florida, Broward was second only to Miami-Dade County with 4,688 foreclosure-related sales in the quarter, down 6% from the second quarter.

Roughly 31% of Palm Beach County home sales involved a foreclosure during the period. The county had 2,303 foreclosure sales in the third quarter, up 2%  from the second quarter.

Daren Blomquist, a spokesman for RealtyTrac, stated: “Foreclosures are still a big part of the housing market because there’s such a built-in discount.”

Foreclosure sales are expected to decline in the fourth quarter because of lender moratoriums that pulled many of those properties off the market in October. Some of the homes are slowly being marketed for sale again.

First-time buyers especially are attracted to these distressed homes because they’re usually priced well below market value.

Broward foreclosures sold for an average price of $122,202 during the third quarter, with the average discount 24% below the typical price of properties not in the foreclosure process, RealtyTrac said. The average price in Palm Beach County was $141,594, and the average discount 26%.

Across Florida, 37% of all home sales were foreclosure-related during the third quarter. In 2005, at the height of the housing boom, foreclosures made up only about 1% of all sales nationally.

It will take a couple more years to rid the South Florida market of distressed homes, said Charles Richardson, a regional senior vice president for Coldwell Banker. He states: “It’s an inevitable part of the recovery period.”

42% of Broward Home Sales are in Some Stage of Foreclosure

Foreclosure Freeze Hurts South Florida Home Sales in October

Nov 24th, 2010
by admin.
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3402851924 f7bb985f57 m Foreclosure Freeze Hurts South Florida Home Sales in October
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As the result of the foreclosure freezes by big lenders, home sales in South Florida and across the state plunged in October.

Yesterday, Florida Realtors announced that sales of existing homes in Broward County fell 28% last month from a year ago, while sales in Palm Beach County dropped 14%. And overall, sales in Florida declined by 21% from October 2009.

Broward’s median home price in October was $217,900, up 3% from a year ago. Palm Beach County’s median was $221,200, off 9% from October 2009.

Broward’s existing condo sales fell by 20% last month, and the median condo price dropped 19% to $67,500. Palm Beach County condo sales were virtually unchanged, but the median price plummeted 27% to $79,600.

Lawrence Yun, the chief economist for the National Association of Realtors, stated: “The housing market is experiencing an uneven recovery, and a temporary foreclosure stoppage in some states is likely to have held back a number of completed sales.”

However Yun also noted that “there appears to be a pent-up demand that eventually will be unleashed as banks resolve their issues with foreclosures and the labor market improves.”

He predicts a gradual rise in home sales, though he said difficulty getting financing and appraisals coming in below negotiated prices are hurting the market.

Foreclosure Freeze Hurts South Florida Home Sales in October

Latest Foreclosure Freeze Will Not Hurt Housing Market

Nov 8th, 2010
by admin.
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300px Chase al Latest Foreclosure Freeze Will Not Hurt Housing Market
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According to industry experts at this weekend’s Fort Lauderdale Foreclosure Convention, the foreclosure freezes by big lenders won’t have a dramatic effect on the South Florida housing market. They stated that inventory may be tight, but plenty of distressed homes remain for sale even as JPMorgan Chase, Bank of America, and other institutions have pulled properties from the market during the past six weeks over concerns about paperwork errors.

Peter Zalewski, principal at CondoVultures thinks the banks likely will take the rest of the year to review filing procedures before resuming foreclosures at the beginning of 2011. He states: “Come January, they’re going to get very, very aggressive.” Even though questions have been raised about what might happen to properties that were improperly repossessed by lenders and later resold, Zalewski concluded he doesn’t envision investors losing their money. He maintains that investors and other buyers who get title insurance shouldn’t have any worries.

This past weekend at the convention, Boca Real Estate Investment Club founder David Dweck encouraged investors to be careful but insisted there is opportunity. He told them to buy inexpensive homes and hold the properties for three to five years while earning rental income. He states: “Do not get caught up in all the hype. If you overpay, you will pay later.”

Latest Foreclosure Freeze Will Not Hurt Housing Market

The Foreclosure Process MUST Continue

Nov 3rd, 2010
by admin.
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Robert Gibbs The Foreclosure Process MUST Continue

Robert Gibbs

According to White House Press Secretary Robert Gibbs, the foreclosure process MUST continue, because without sales of homes in distressed areas the “recovery in the housing market stops. It’s frozen.”

On cnnmoney.com, Gibbs elaborates:

“That obviously can have — we believe and others believe — a very negative and detrimental impact to our economic recovery efforts and the housing markets in states that have been hardest hit.”

Of course, foreclosures are a last resort — loan modifications, short sales and all other rescue options should be exhausted before sending properties to the auction block. Additionally, the documentation process needs to be as accurate as possible, which is an issue that several major lenders are addressing right now during the “foreclosure freeze.”

Despite the “freeze” from some lenders, foreclosures are still for sale throughout the nation. And most of them are available to purchase for significantly less than market value.

The fact of the matter is that foreclosures need to happen “for there to be a full housing recovery” and because they are “an important part of ensuring longer-term stability in the market is to enable properties to be resold to families who can afford to purchase them.”

To search foreclosed homes for sale in your area right now click here.

The Foreclosure Process MUST Continue

2012 Real Estate Predictions

Oct 27th, 2010
by admin.
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300px US mortgage delinquencies 2012 Real Estate Predictions

Delinquencies on US mortgages, totals of 30 da...

According to The Mortgage Bankers Association, the housing market will stabilize further next year and start rebounding in 2012.

They state that the total existing home sales for 2010 will be around 8% lower than in 2009, despite a boost to sales in the first half from the homebuyer tax credit program. Existing home sales are projected to increase modestly in 2011, increasing by a little less than 2%, before increasing by about 16% in 2012.

And home buyers shouldn’t expect mortgage rates to keep falling. The MBA concludes: “Absent some blockbuster post-election announcement from the Fed on November 3rd. We do not expect to see a further decline in rates.”

2012 Real Estate Predictions

Home Sales Rise in August

Sep 23rd, 2010
by admin.
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300px US DeptOfCommerce Seal.svg Home Sales Rise in August

Seal of the United States Department of Commerce

Finally, some optimism on the housing front. According to the Commerce Department on Tuesday, home starts had their best showing since April. With a 10.5% rise in August to an annual pace of 598,000 units.

Sales and starts took huge hits as soon as the home buyer tax credits ended this summer, leading economists to wonder if the housing market was positioned for more pain.

Although homes remain affordable and mortgage rates extremely low, qualification standards are tight and frankly, the lackluster job market doesn’t inspire confidence among many “would-be” buyers.

Analyst Mike Larson of Weiss Research in Jupiter, concludes:

“Starts likely won’t plunge from here. But neither will they surge. We’ll just be stuck in the mud for a while.”

Home Sales Rise in August

Florida is #3 for Homebuyer Tax Credits

Sep 3rd, 2010
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300px Official seal of the American Recovery and Reinvestment Act of 2009.svg Florida is #3 for Homebuyer Tax Credits

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According to a report released by the Government Accountability Office, the state of Florida accounted for 64,879 claims under the three federal first-time home buyer credits offered since 2008.

FLA residents claimed $455,565,365 through the credits offered under the Housing, Recovery and Assistance acts.

Only California, with 116,896 claims, and Texas, with 98,971 claims, had more.

Nationwide, first-time home buyers submitted 3.32 million claims totaling $23.5 billion over two years, about $1.5 billion more than original estimates from the congressional Joint Committee on Taxation.

The Housing Act provided taxpayers a refundable credit equal to 10 percent of the home’s purchase price, up to a maximum of $7,500. The Recovery Act provided a refundable 10 percent tax credit, but increased the maximum to $8,000. And, the Assistance Act extended the Recovery Act credit through April 30, and it allowed certain long-term homeowners in the market to claim a $6,500 tax credit.

The federal assistance is widely credited with fueling the national housing market in 2009 and the first half of this year, just as the new car tax credit may have staved off disaster for the auto industry.

The National Association of Realtors recently blamed the expiration of the tax credits for the huge decline in the sale of existing homes in July.

Florida is #3 for Homebuyer Tax Credits
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