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.
Short Sales And Foreclosures In Tallahassee
The real estate graph below shows closed distressed sales in the Tallahassee MLS since 2010.
The information in the graph above is for January and February of each year. The black bars show the number of closed short sales, while the red bars show the number of all closed distressed home sales. The blue line measures the ratio of short sales to all distressed sales in the Tallahassee real estate market.
As you can see, 2014 has shown a great decline when compared to the past four years.
Cause Of The Huge Trend Change
There are a few factors that are working to force this huge trend change in our housing market. First of all, the Mortgage Forgiveness Debt Relief Act has not (yet) been extended to include 2014, and without this extension there will be less of a financial incentive for homeowners to undergo a short sale instead of waiting for a final foreclosure sale from the lender(s).
In the past few years, this law allowed short sellers the ability to sell their home for less than what was owed and not have to declare the debt relief as ordinary income. As things stand now though, if somebody utilizes a short sale to sell their home, they very likely will end up having to pay income taxes on the amount of debt that was forgiven by the bank.
Secondly, home values are on the rise in most US markets, so lenders might feel as if dragging their feet on a resolution for properties that are occupied might work in their favor. With owners living in the house and maintaining the properties, banks might very well feel as if time is on their side.
Of course, this kind of thinking does not work with vacant homes, and current appreciation levels will not keep up with the deterioration that occurs when nobody is living in and caring for a home.
So what does this mean for homebuyers in the market today? It means that there are fewer short sales available, and lower odds of successfully buying a short sale that appears to be available.
This likely will mean short sales will become a niche market where only investors will continue to pursue them, while owner-occupants will go the more traditional route, buying bank foreclosures/REO properties and arms length sales.
Recently Listed Short Sales And Foreclosures In Tallahassee
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If you want to know more about short sales and foreclosures (and even the good 'ol fashioned arms length homes for sale) in Tallahassee, just drop me a note and we can schedule a time to help you prepare for getting the absolute best deal for you budget and time constraints.