Sorry if already posted Home/Condo Sales Price Rising Inventory Low :) (Sarasota: bank owned, for sale)

[FLSnowbirds]

http://www.sarasotarealtors.com/file...1214123214.pdf

[Sunshine Rules]

Home buyers in our area are now running into serious competition for homes/condos, especially in specific locations and/or price ranges.

Bidding wars are becoming much more common as the inventory of for sale homes remains low.

Some buyers are having a difficult time accepting the new reality of less homes for sale and more competition for them.

For anyone looking to buy a home or condo in the Sarasota area either now or in the near future, I highly recommend either (a) getting pre-approved if you're going to get a mortgage so that you have a pre-approval letter to submit with your offer or (b) obtain a Proof of Funds letter to verify you have sufficient funds in a "liquid" account of some sort if you will be paying by cash. Having your proof of financing or funds to submit with your offer will give it more strength when competing with other bidders for that dream home or condo. For buyers of a REO (bank owned) or short sale listing, having proof is mandatory with all offers - no proof, your offer is automatically rejected. By the way, for proof of funds it is better that it be current, ie dated within the past 30 days, 60 days tops.

For those going the mortgage route, it's important to work with a lender that is willing to provide a new approval letter within hours of finding a home you want to purchase so that the letter includes the address of the property AND amount the buyer plans to offer.

As competition heats up , buyers need to be prepared to move quickly.

[Tetto]

Originally Posted by Sunshine Rules

Home buyers in our area are now running into serious competition for homes/condos, especially in specific locations and/or price ranges.

Bidding wars are becoming much more common as the inventory of for sale homes remains low.

Some buyers are having a difficult time accepting the new reality of less homes for sale and more competition for them.

For anyone looking to buy a home or condo in the Sarasota area either now or in the near future, I highly recommend either (a) getting pre-approved if you're going to get a mortgage so that you have a pre-approval letter to submit with your offer or (b) obtain a Proof of Funds letter to verify you have sufficient funds in a "liquid" account of some sort if you will be paying by cash. Having your proof of financing or funds to submit with your offer will give it more strength when competing with other bidders for that dream home or condo. For buyers of a REO (bank owned) or short sale listing, having proof is mandatory with all offers - no proof, your offer is automatically rejected. By the way, for proof of funds it is better that it be current, ie dated within the past 30 days, 60 days tops.

For those going the mortgage route, it's important to work with a lender that is willing to provide a new approval letter within hours of finding a home you want to purchase so that the letter includes the address of the property AND amount the buyer plans to offer.

As competition heats up , buyers need to be prepared to move quickly.

I was under the impression that there was a large bolus of short sale/bankruptcy/bank owned etc that was going to flood the market again.

I'm glad things are turning around apparently

[Sunshine Rules]

When looking at the "shadow inventory" of homes where the owners are in distress (ie behind on their mortgages), you have to consider a number of factors. Shadow inventory in Florida typically takes up to 2 years (or more) from the time the homeowners miss 3 payments until the actual foreclosure process is completed by the primary lien holder. So yes, shadow inventory is still a factor in our area when you look at the raw data.

Statistics can be misleading. The metro Sarasota area has a population of about 250,000. The city of North Port in south Sarasota county has a population of about 58,000 people. But about 1/2 of all lis pendens filings (the filing of notification of suit pending) in Sarasota county are on properties located in the North Port - south Venice area. So if you look at just the stats for Sarasota county, you'd be under the impression there are a number of potential distress sales coming on the market. Break those numbers down by area and, if you're looking to stay in the immediate Sarasota metro area, the pool of potential distress properties diminishes.

While we still have area homes in the foreclosure pipeline, banks have also changed how they are disposing of them once they obtain title. Banks are no longer flooding the market with REOs priced 20% below the market prices. They are now releasing them at intervals and pricing them at or ABOVE current market prices, especially if the condition is decent. Many of the banks are now having companies come in and clean up & paint the interior of these homes, add new carpet and appliances if necessary, and clean up the landscapes before listing them to optimize pricing.

This change in outlook on pricing is also impacting short sales. I know a number of deals that, after waiting months for a response from the lien holders, the bank(s) came back with demands for higher sales prices that were more in line with current market prices (vs when the home went under contract). Remember, in a short sale situation, the owner of the property must have the approval of all lien holders (banks, HOAs, etc) in order to complete the sale.

Regarding short sales, you may be seeing less of those going into the future unless Congress passes new legislation to extend the tax breaks under the 2007 Mortgage Forgiveness Debt Relief Act, which expires 12/31/12. Under the Act, qualifying homeowners who had mortgage debt forgiven by lenders thru the short sale process were exempted from paying income taxes on the amount of debt forgiven. As of 01/01/13, homeowners doing short sales will now be responsible for paying income taxes on that forgiven debt -- which many could not afford to pay as they are already experiencing financial difficulties. Imagine doing a short sale and suddenly owing the IRS taxes on $100,000 of "income" from the short sale. Some experts predict that unless Congress acts quickly to extend the tax breaks, many homeowners will no longer opt for doing short sales, which will decrease the inventory of available homes for sale even more.

I try to read everything I can get my hands on in respect to our area real estate market and economy, as well as pending legislation (local, state and national) that can impact the real estate market. CoreLogic is a good source of tracking statistics. According to CoreLogic, our area shadow inventory has been consistently trending downward from a peak in January of 2010. Another important statistic is the number of homeowners becoming delinquent on their mortgages -- that number for our area has also been steadily shrinking.

No one can predict the future with absolute accuracy. The best we can do is gather as much data, facts and knowledge as we can and make educated guesses based on the data and facts.