Where does the real estate market in the area stand? (Orlando: bank owned, short sales)

[beckycat]

I've been watching the real estate market lately. From my observations, I've noted the following:

1) Inventory is down. I'm wondering why many people aren't selling?

2) The majority of the inventory that is available is priced low and has been reduced.

3) As for condos in my area that were foreclosures, they have been bought up by foreign investors.

I'm trying to figure out where the market in the area stands at this point. Any ideas?

[chopchop0]

Market is starting to look up in the area i think

Home prices show yearly gain for first time since crash - Orlando Sentinel

I've definitely heard that the nicer areas like Winter Park and Dr Phillips are already seeing a fair amount of appreciation in the last 6-9 months.

[kyle19125]

Originally Posted by beckycat

1) Inventory is down. I'm wondering why many people aren't selling?

Because they can't afford to. Example (not me thank god!): Homeowner buys a home in 2007 for $250,000. In 2011 after the housing crash it has devalued to $185,000. The house was financed for 225K after 10% down, so if the owner manages to sell at actual value (185K), the homeowner has to cough up in the neighborhood of 40K to get out of it. Not a pretty picture.

[Bideshi]

The shallow inventory is artificial. Mortgage houses are keeping foreclosed property off the market to prop up prices. How long can they keep doing it?

[kyle19125]

Originally Posted by Bideshi

The shallow inventory is artificial. Mortgage houses are keeping foreclosed property off the market to prop up prices. How long can they keep doing it?

As long as they need to thanks to the bailout money. It's actually a good thing they're sitting on foreclosed properties as releasing them would devastate real estate sales for years to come. The whole mess is their fault anyway so it's only just that banks absorb the losses for awhile anyway.

[beckycat]

So, I'm wondering, is now the time to sell and get a fair price?

Kyle: I had the same idea about people not being able to sell.

I hear about so many people short selling.

[GregTraub]

1. Kyle19125 nailed it. People aren't selling unless they have to and actually can. The fact is inventory levels haven't been this low since 2005 (height of the boom times) but this hasn't yet translated into higher prices as other factors are keeping prices from shooting up at 20%+ a year like in 05'. I'd say it's a sellers market for sure....but the best way I'd describe it is its a bankers market

2. Priced low because the majority of inventory out there is Bank owned or foreclosure, and many aren't in great shape or the short sellers just aren't motivated to sell so they keep their price high. SOME banks are holding onto their foreclosed inventory for a while, but the majority simply aren't foreclosing quickly because they don't want the liability, the big boys are getting sued left and right and yes, because they got bailed out and get to use fuzzy accounting when it comes to defaulted loans, they don't have the same motivation as normal to clear out their bad loans.
Plus while buying is VERY strong (most well priced good condition homes are selling in days with multiple offers) the majority of it are investors both foreign and domestic. While some well marketed developers are able to see 20-30% increases in value with localized (uninformed IMO buyers) most investors are actually investors this time around (not speculators) and they are not quickly bidding up prices.
Prices will only start to show significant gains when owner-occupants start coming to the table. That will only happen in mass when jobs stabilize. I am starting to see some of that come back right now, but sparadically and only from people with long-term very secure jobs. This is why some of the better area's that have gone through most of their foreclosure inventory are seeing some appreciation this year.

3. You got it! cheap condo's (<50K) boomed late 2010. Some that bought at the bottom in the 30K range actually are able to sell them now with a great profit because there is still a HUGE demand for properties under 50K, and that is an all cash market so no appraisals or financing issues to constrain true market prices.

[theoldnorthstate]

thanks Greg for the info

all i know is zillow depresses me and just when it says my house value goes up the next month it goes down

so your info helps understand the why

[beckycat]

Originally Posted by GregTraub

1. Kyle19125 nailed it. People aren't selling unless they have to and actually can. The fact is inventory levels haven't been this low since 2005 (height of the boom times) but this hasn't yet translated into higher prices as other factors are keeping prices from shooting up at 20%+ a year like in 05'. I'd say it's a sellers market for sure....but the best way I'd describe it is its a bankers market

2. Priced low because the majority of inventory out there is Bank owned or foreclosure, and many aren't in great shape or the short sellers just aren't motivated to sell so they keep their price high. SOME banks are holding onto their foreclosed inventory for a while, but the majority simply aren't foreclosing quickly because they don't want the liability, the big boys are getting sued left and right and yes, because they got bailed out and get to use fuzzy accounting when it comes to defaulted loans, they don't have the same motivation as normal to clear out their bad loans.
Plus while buying is VERY strong (most well priced good condition homes are selling in days with multiple offers) the majority of it are investors both foreign and domestic. While some well marketed developers are able to see 20-30% increases in value with localized (uninformed IMO buyers) most investors are actually investors this time around (not speculators) and they are not quickly bidding up prices.
Prices will only start to show significant gains when owner-occupants start coming to the table. That will only happen in mass when jobs stabilize. I am starting to see some of that come back right now, but sparadically and only from people with long-term very secure jobs. This is why some of the better area's that have gone through most of their foreclosure inventory are seeing some appreciation this year.

3. You got it! cheap condo's (<50K) boomed late 2010. Some that bought at the bottom in the 30K range actually are able to sell them now with a great profit because there is still a HUGE demand for properties under 50K, and that is an all cash market so no appraisals or financing issues to constrain true market prices.

Thanks Greg for summing everything up. My next question is how do you price your house? It seems like there are two categories: 1) Foreclosed, REO's, and short sales. 2) Homeowners. They are two different prices as well. Therefore, if you are a homeowner, not upside down, and selling, is it a good time to sell? Would waiting til the spring risky? It's so hard to tell.

[beckycat]

Originally Posted by theoldnorthstate

thanks Greg for the info

all i know is zillow depresses me and just when it says my house value goes up the next month it goes down

so your info helps understand the why

Yeah, Zillow is so discouraging. From what I understand, it's not accurate either due to the fact it includes all sales including foreclosures. There is a different way to figure out what your home is worth.