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Foreclosures In Tallahassee - Good News, Bad News

When we look at the number of foreclosures in Tallahassee, it is very easy to see the glass as half full, or half empty.

On the one hand, these distressed home sales have fallen to the lowest level recorded in the past 7 years, yet on the other hand, they are still a very large segment of the Tallahassee real estate market.

Currently, more than one in five of every closed home sales in Tallahassee continues to come from a distressed home seller, and the current rate of new foreclosure activity remains at an alarmingly high percentage of all real estate transactions.

Foreclosures In Tallahassee

There are two ways we track foreclosures in Tallahassee. First, we measure the number of new lis pendens filed each month (a lis pendens filing is the initial step in the foreclosure process). The graph below shows the total number of filings each month.

Lis Pendens In Tallahassee

The blue bars show the number of monthly lis pendens filings, and the yellow line shows the one-year average of monthly filings. Currently, the trend has fallen to 74 lis pendens filed each month.

Tallahassee Foreclosure Sales

While lis pendens are the start of the foreclosure process, not every one filed becomes a foreclosure sale. The graph below shows the total number of foreclosure sales each month.

Foreclosures In Tallahassee 

Just as in the prior graph, the bars measure the monthly number of foreclosure sales in Tallahassee, while the yellow line shows the one-year trend (monthly average). Currently, Leon County has averaged 74 foreclosure sales each month over the past year.

Distressed Property Status In Tallahassee

When we combine the information from each of the top two graphs, we generate the one below.

Tallahassee Foreclosure Situation

The lis pendens are shown in green, while foreclosures are shown in red (both annualized and recorded on the left vertical axis). The ratio between the two is shown in blue and recorded on the right vertical axis.

Currently, there is one foreclosure sale for every new lis pendens filed.

Contrast that with the far left of the graph, when roughly 12% of lis pendens resulted in a foreclosure sale. This means that "back then", only 1 of every 8 home sellers that were served a lis pendens actually lost their home to a foreclosure sale. 7 of every 8 were able to avoid foreclosure with one of the following methods:

  1. get current with their mortgage payments
  2. refinance the home with an alternative program
  3. sell the home and recover the equity at closing
  4. sell the home via a short sale

Each of these methods helped the homeowner avoid being foreclosed upon.

But times change.

The mass of distressed properties that flooded the Tallahassee real estate market, coupled with declining home values which extinguished home equity, resulted in a market where foreclosure was a viable option for many people who had fallen behind on their mortgage payments.

Current Foreclosure Situation In Tallahassee

You might wonder how the ratio of foreclosures to lis pendens filings exceeded 100% in the graph above. That is actually a positive sign.

Lis pendens have been generally on the decline since October of 2012, and by December of 2013, we first saw the annual number of foreclosure sales exceed the annual number of new lis pendens filed. The first major step in our distressed property correction.

Currently, the number of new lis pendens being filed is at levels far lower than what we have reported since the beginning of 2009, but these levels are still too high.

Perhaps the easiest way to demonstrate this is to compare new filings with new sales.

Lis Pendens Filings In Tallahassee Florida

 This graph simply compares two un-related events, but the relationship is still important to note.

For every 5 new home sales, a lender is filing a lis pendens in Leon County. One could simply say that currently one in every five home loans is "going bad." Obviously, this trend needs to continue downwards.

So the glass being half-full shows us that all distressed property trends are showing great improvement in 2015, while the half-empty glass shows that distressed actions are still far higher than a healthy housing market would report.

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Joe Manausa Real Estate
2066 Thomasville Rd
Tallahassee, FL 32308
(850) 366-8917