Weekly Special | May 8, 2016

Distressed Properties Not The Same ‘Ol Thing

The number of distressed homes for sale in Tallahassee has been on the decline for more than two years, and we are starting to see significant differences between the remaining distressed homes versus the arms length sellers in the market.

In the graph above, we separate arms length properties from those being sold in a situation of distress (short sale, foreclosure, bank owned, etc.).

The red bars reflect the number of distressed homes for sale while the green bars measure the number of arms length homes for sale (both recorded on the left vertical axis). The red line shows the one-year average percentage of the market being sold distressed.

Currently, the one-year trend of distressed sales is at 21% and falling, and I expect it to be below 15% by year’s end.

The graph below measures the difference in value between homes sold distressed versus those sold arms length, and currently the discount is nearly 40%.

I believe this is a sign that we’ve begun the end run on distressed properties and that we can expect to return to a “normal” market where the majority of homeowners have equity again.

The original one-page Weekly Special PDF is still available.