By STEVE MCALEER, SFR
In today’s real estate market, short sales and foreclosures have become widespread. Both are considered forms of “distressed” Inventory.
In November 2008, 118 short sales and 259 REOs (single family homes) were sold in Broward County. When looking at the statistics, 2009 seems to be the height of distressed inventory. There were 222 short sales and 350 REOs sold in November 2009. However, 2010 shows a substantial decrease in sales of both short sales (183) and REOs (235).
For those who aren’t familiar, a short sale is when someone is in some type of financial distress and needs to sell their home “short” of the amount of money owed on their mortgage. A foreclosure is when a lender officially sues a homeowner to take possession of the title of the home due to the homeowner being in default of their payments. Once the lender Forecloses, the lender takes title and it becomes an REO (Real Estate Owned) property.
So what does this all mean? There are many projections in the media stating how long this “distressed” inventory will be out there. I have found that most, on average, say two to three more years. With the statistics above, it shows that current buyer’s already missed the best part of the market. There is still inventory and choices for the buyer’s of today, just a smaller pool of options and a lot more competition from other buyer’s.
With a large and growing percentage of buyer’s looking to purchase a home for under $200,000 along with a dwindling inventory in this price range, this segment of the market has turned more into a seller’s market. The higher the asking price of the home, however, the fewer buyer’s there are and so the more negotiating power the buyer has.
On the flip side of this scenario, changes in distressed inventory have affected the seller as well. This affect can be a positive one depending on the price of the home. If they are listing their home for under $200,000, there is excess demand, so selling should be a bit easier. Over $200,000, the game changes.
If you are in the market to buy real estate, you still have some great opportunity, but competition from other buyer’s looking at the same homes you are is getting fiercer. So, my best advice is to know what you want, find a Realtor that will work with you to find the best deals and inventory, and act quickly. If you are a seller and are in some type of financial distress and need to sell, talk to a certified short sale real estate specialist. You have options available to you, including a short sale or deed in lieu. If you are not in financial distress and are unsure if you should sell or what your home is worth in today’s market, call a Realtor to talk about your options.
It’s an exciting time to be in the real estate market. No matter what you are looking for, opportunity exist, just don’t let it pass you by.
Steve McAleer, from Weichert Realtors – Distinctive Homes, is a licensed Realtor. For more information, visit www.BuyInFortLauderdale.com
