Inventory Of Foreclosed Homes In Tallahassee Is Declining
Historically, foreclosures in Tallahassee have represented a very small percentage of the homes for sale, but the crash of the market changed that significantly.
Fortunately, the inventory of foreclosed homes is on the decline, and this post shows you the remaining 60 foreclosure listings as well as a report on how lis pendens and foreclosure sales are impacting the Tallahassee real estate market.
Home Foreclosure Tracking
One way to keep an eye on the health of the market is to track the number of foreclosures that occur at any given time. We can do this on two different ways, as the foreclosure process starts with a legal filing (Lis Pendens) and ends with a foreclosure sale on the Leon County Courthouse steps.
In the lis pendens graph above, we record the number of lis pendens filed each month (blue bar) and then calculate the one-year average of the filings (yellow line).
The trend is the lowest we've reported in more than ten years (very good news), but it has begun to move higher over the past few months. Time will tell if this is just random or if a new trend of distressed properties is emerging.
Foreclosure Sales In Tallahassee
While lis pendens represent the start of the process, foreclosure sales are the end of the road for many, which end up feeding the inventory of Bank Owned Homes. The following graph shows the number of foreclosures in Tallahassee each month going back ten years.
The foreclosure graph above plots the number of foreclosure sales each month for the past ten years, while the yellow line shows the one-year average number of foreclosure sales.
If the current trend continues, the foreclosure market will soon return to levels last seen before the housing market recovery, which began (roughly) in 2007.
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Tallahassee Foreclosures And Lis Pendens Filings
One way to view the health of the Tallahassee housing market is to observe "what is happening" to distressed properties.
Ratio Of Foreclosures To Lis Pendens
The graph above calculates the ratio of foreclosure sales to lis pendens filings. So why is this so important?
When the market had equity (homes were rising in value each year), a lis pendens filing did not have to result in a foreclosure sale. There were other remedies for the distressed homeowner. Below are a few examples:
- Use the equity in the home to get current on mortgage payments
- Sell the home and repay the mortage and liens in full
- Conduct a Short Sale, approved by the bank
But as home values declined, equity in the market went away. Homeownes in distress who no longer had equity were left with either doing a short sale or letting the bank take the home in foreclosure.
The graph above shows that currently, 53% of all lis pendens filed last year ended up in a foreclosure sale. While significantly improved since the peak of despair in 2014, today's ratio is still far above the 9% recorded prior to 2010.
Thus, the health of the Tallahassee real estate market is "fair and improving," but we still have a ways to go.
We are expecting record-setting appreciation this year due to high demand and low inventory, thus increased values will provide some of this year's distressed sellers to use one of the remedies listed above.
Buyers should consider this a "last call" for finding multiple foreclosures that could fit their needs, as we will see the numbers decline with rising equity in the market.
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If you are interested in knowing more about buying a foreclosure in Tallahassee, we would love to help you.
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