We have been observing distress home sales and reporting their growth for quite some time here at the Tallahassee Real Estate Blog, so I guess it was only time that we brought them to you with a real estate graph.
Roughly 1 in every 3 home sales recorded in the Tallahassee MLS was categorized as a distress home sale, which includes bank owned homes (REO), homes in foreclosure, relocation houses, homes with short sale potential, and homes where the owner would offer lease purchase or some sort purchase money mortgage. Though not all of these are necessarily true distress situations, most of them are and just about all of them will sell under the same conditions and owner decision making processes.
Distress Home Sales Growing Rapidly
The real estate graph above provides a very clear picture of how the Tallahassee real estate market has undergone an incredible shift. Where distress home sales traditionally represented 2% or less of the market, we see their numbers rising at an alarming rate. This is very important information for prospective home sellers, as understanding one's competition and their needs is a critical element in strategy, regardless of the game or market that one is entering.
We have created a list of distress home sales in Tallahassee, and we update the list on a regular basis. When you go through the list, not only are you finding some of the best buys in Tallahassee, but you are also finding the price ranges in which home sellers who are not in the same situation will have a very difficult time competing.
The Future Of Distress Home Sales In Tallahassee
Unfortunately, the real estate graph above will not be turning friendly anytime soon. I estimate that Tallahassee must deal with 5,000 or more distress properties that have not yet hit the housing market. Alone, these numbers are nearly two years worth of supply, meaning that it is highly unlikely that our real estate market will turn in the next three years. Home sellers should expect pricing pressure for at least the next three to five years.
Joe Manausa, MBA is a 26 year veteran of real estate brokerage in Tallahassee, Florida and has owned and managed his own company since 1992. He is a daily blogger with content that focuses on real estate analytics and providing his clients with a tactical advantage in today's challenging market.