Distressed Properties Move Market
I have written quite a bit about distressed properties in Tallahassee and equally as much about special financing opportunities in the housing market. These two separate types of opportunities represent the impetus of change for our housing market recovery, so I like to track them very closely.
After compiling the data for the first nine months of 2009, I broke out a special report to see the impact that both special financing homes and distressed properties were having on the Tallahassee housing market. Here is the question I wanted to answer:
Which types of homes are selling faster?
- Ones that offer special Financing.
- Distressed Properties
In order to find my answer, I went to the MLS and downloaded every property that had left the market. With over 4,000 individual listings to go through, this took me a little longer than I had expected. But I deleted the duplicate listings and was able to produce the following real estate graph which highlight both successes (homes that sold) and failures (homes that were withdrawn or expired from the MLS without selling).
With less than 3% of the homes that sold in 2010 offering special financing, it would appear that distressed properties were far more effective at motivating home buyers thus far. Twenty six percent (26%) of all closed home sales in the MLS this year were distressed properties, and from what we can see in the Tallahassee housing market, that number is only going higher.
As a matter of fact, when you actually look at the list of distressed properties for sale in Tallahassee, you realize that it is growing larger as the market values reduce the number of homeowners who are "right side up" in their homes. It was very rare in the past to find somebody who owed more on their house than it was worth, but today we are finding the majority of people who have purchased or refinanced in the past 8 years to be in this situation.