Short Sales Still Dominate Distressed Homes For Sale
Short sales still dominate distressed home sales in Tallahassee and North Florida, based upon information pulled from the Tallahassee MLS early this morning (February 17, 2011). Currently, more than 28% of homes are being sold under a situation of distress, meaning it is a short sale, bank owned property, a relocation property, or it's in foreclosure.
When we look at all the homes for sale in the Tallahassee MLS, we not only see supply too high, we also are seeing an unhealthy portion of the inventory being sold under situations of distress.
In the real estate graph above, the red slice shows distressed properties in North Florida, and this segment of the housing market represent 28% of all available homes for sale in the Tallahassee MLS.
When we break-down distressed properties into sub-groups, we notice the dominance of the homes being sold short.
North Florida and Tallahassee short sales far out-number the bank-owned properties, indicating that banks are still taking an extended period of time to actually move to a foreclosure sale. In the graph above, I have used information from the Tallahassee MLS to categorize the current inventory of distressed homes for sale.
The purple section shows that nearly 60% of the distressed properties in Tallahassee and North Florida are short sales, while the red shows the ones that are in foreclosure (imagine the purple area minus the red area are the short sales not currently served with a lis pendens). The blue section are homes that have already been foreclosed upon and are owned by a bank or lender. Finally, the green section are homes for sale due to a relocation.
Most people who report on real estate do not include relocation in the distressed properties report. I include these because ultimately there will be some sort of group decision made on many of these properties, and the seller is no longer in an arms-length situation having been moved out of the area for a new job opportunity (or other reason). Regardless, these properties will often sell for amounts below the market and in line with some of the distressed properties.