Tallahassee Foreclosure Report June 2015

The number of distressed properties in Tallahassee is finally on a healthy decline, perhaps a sign that a healthy rate of real estate appreciation will return.

In order to assess the distressed property market in Tallahassee, we must look at what has happened in the past, what is happening now, and what current trends indicate will be happening in the near future.

Our report includes an analysis of lis pendens filings through May 2015 (a lis pendens is usually filed as a start of the foreclosure process), all foreclosure sales through May, and a look at the ratio of lis pendens that ultimately convert into a foreclosure sale.

Lis Pendens In Tallahassee

Our first graph is a monthly measurement of lis pendens filed in Leon County, Florida.

The number of filings each month is shown in blue, while the one-year average (trend) of these filings is represented by the yellow line.

The good (great) news is that we keep seeing the trend decline. In October of 2010, the trend exceeded 225 lis pendens filed each month whereas today that trend is down to 75 filings per month. That is a strong decline of 67% in less than five years.

We are not out of the woods yet though. The 75 filings per month still means that for every four homes sold, one home is served with "foreclosure papers."

The following is a list of short sales currently on the market, and it is likely many of these have been served with lis pendens as well.

Short Sales

Tallahassee Foreclosures

While the lis pendens is the beginning of the foreclosure process, a final sale at the Leon County Courthouse (online of course) is required for a "foreclosure" to ultimately occur.

In the graph above, both the lis pendens trend (green bars) and the foreclosure sale trend (red bars) are shown and measured on the left vertical axis.

The blue line measures the ratio of lis pendens that result in a foreclosure sale, and we are now seeing it stabilize above 100%.

This means that the number of lis pendens being filed every month is fewer than the foreclosure sales that occur. This is good, as it means we are clearing out the distressed properties that have been weighing down the Tallahassee real estate market.

Take a look at the blue line from left to right and you will see a significant change in how problem loans are being handled. Seven years ago, roughly one of every eight lis pendens resulted in a foreclosure sale. That means the homeowner had remedies (like selling the home for its equity and moving on), but lower home values over the past 8 years has made it so that a foreclosure sale is most often the only option.

When we see things return to normal (well fewer than 100 lis pendens filed per month), we'll likely see a healthy appreciation rate return as well. 

The following list is the most recent foreclosures to enter the market.

Bank Owned Properties

I hope you have gained something of value from our June Foreclosure Report, feel free to drop me a note if you have further questions that this did not address.