Central Florida Real Estate Blog

On January 10, 2011, the My Florida Regional Multiple Listing Service (http://www.mfrmls.com)  which covers most of the Central Florida area released the December 2010 Real Estate Sales & Inventory Report for the Lake and Sumter County region. Home values have trended down slightly over the past thirty day reporting cycle and the up-one-month, down-the-next trend continues.   

The number of home sales that closed in December spiked up to 347 units. This is an increase of 19% from November. While inventory is being absorbed, there still over 4,500 active homes for sale in the marketplace. MFRMLS is currently reporting a 13 month supply of inventory, but these numbers are significantly distorted due to the huge number of pending short sales which will most likely re enter the active inventory, or end up in foreclosure.

In regards to the average list price of a home, values increased by a nominal 2% from November to December and are virtually unchanged over the last 12 months. While it appears the bleeding may have slowed down, by no means is the patient out of intensive care.

We are looking at the same trend when it comes to the average sale price with a slight increase of 2% from November to December. From Dec.'09 thru Dec.'10, the decline was only 1.5% and appears to be flattening out. To illustrate the change, on a $150,000.00 property, your home decreased on average $2,250.00 in value. It's hard to believe I'm saying this, but this is positive news in comparison to the depreciation we've seen over the last 2-3 years.

Also consider the dynamic between Sellers and Buyers during the negotiating process. As of December '09, Buyers were negotiating on average 9% off the asking price. As of December'10, that number has decreased slightly to 8%, indicating Buyers still have the upper hand in the negotiation process. If you are currently a Seller in this market, pricing your home close to market value will show Buyers and their Agents you are serious, realistic, and ready to sell. 

The number #1 selling price category in Lake & Sumter Counties is the $120,000-$139,999 range and accounting for 13.06% of the yearly sale. Furthermore, the $0.00-$99,999 range accounted for 35.72% of sales, while the $100,000-$159,999 range accounted for 34.87%. Additionally, the $160,000-$200,000 range accounted for another 12.16% of sales. Collectively the $0-$200K range makes up 82.75% of all sales in the area. 

Where is the market heading from here? As reported in the December issue of DSNews (http://www.dsnews.com), the November figures released by Fitch Ratings (http://www.fitchratings.com) put the industry's shadow inventory at 7 million homes. The agency defines the shadow supply of properties as loans that are delinquent, in foreclosure, or real-estate-owned by the servicers, and Fitch says based on recent liquidation trends, it will take more than 40 months to clear the existing distressed inventory.

According to the ratings agency, the number of months between the date of the borrower's last payment and the date of liquidation has steadily increased over the past several years and is now at more than 18 months on average. Fitch says that is the highest figure on record. While the volume of newly delinquent mortgages has begun to improve in recent quarters, Fitch says liquidation rates of existing distressed properties have been constrained by weak demand and expanded initiatives to modify loans for troubled borrowers.

On top of that, the agency's analysts believe the recent discovery of defects in the residential mortgage foreclosure process will further extend liquidation timelines, slowing the resolution of distressed properties in the shadow inventory and preventing home prices from finding a floor.

"While the reduced volume of distressed sales since 2009 has temporarily helped home prices, Fitch believes that the extension in foreclosure and liquidation timelines is simply prolonging the housing correction under way", the agency said in its report. The total number of troubled loans reached a peak in early 2010 and has begun to show some improvement prior to the most recent foreclosure moratoriums resulting from documentation issues, Fitch said.

According to the ratings agency's analysis, the latest industry trends indicate that it will take more than three years to sell the properties of loans that are currently seriously delinquent, in foreclosure, or REO. Fitch says for judicial foreclosure states, such as Florida, it is expected to take longer than the national average of 40 months to resolve the distressed loans, while for nonjudicial foreclosure states, like California, the inventory will likely be resolved faster.

If you currently are a potential Buyer or Investor, there are tremendous opportunities in the Lake & Sumter market. To receive a full copy of the Sale & Inventory Report, please email joe@rockspringsrealty.net and I will forward you a copy at no charge or obligation. 

Rock Springs Realty is a full-service Real Estate Brokerage working with Buyers, Sellers, and Investors throughout the Central Florida Area. We cover all areas of Lake, Sumter, Orange, Seminole, Osceola, and Volusia Counties. Our sales staff has extensive experience in the REO (Bank Owned Foreclosures) sector and welcomes the opportunity to discuss your real estate needs. You can reach us toll free at (877) 333-2811 or on the web at www.rockspringsrealty.net

P.S. - If you would like a "Free List" of bank-owned foreclosure properties in your area, please contact me at the toll free number and I will forward you a detailed list within 24 hours.

Best Regards,
Joe Bornstein, Broker/Owner
Rock Springs Realty, LLC
3780 Rochelle Lane
Apopka, FL 32712