As we enter a new decade I'm eager to see what 2010 holds for South Florida's real estate market and if many forecast predictions from last year will come true. Due to the new short sale rules that are being put into place, more and more, I'm hearing my colleagues call 2010 the year of the short sale.
While short sale success stories are more common as opposed to this time last year fair market pricing is still numero uno. Many home sellers have come to the realization that their home was overpriced to begin with and as a result have either become motivated to reduce the price to compete with bank reo's and short sales or have taken their property off the market altogether.
Short sales have become a major component in our real estate market thus setting the trend for appraiser's comparables.
Banks are beginning to go along with short sales in increasing numbers, three years into a U.S. housing slump that pushed the economy into a recession and cut resale values by 30 percent from the peak in July 2006. Short sales almost tripled to 40,000 in the first six months of 2009 from the same period a year earlier. Yet for each short sale, there were 25 foreclosures started or completed in the first half of this year, according to data from the Office of Thrift Supervision and the Office of the Comptroller of the Currency.
Pressure is building to approve short sales as the number of delinquent mortgages has grown to 3.2 million and an estimated 7 million foreclosures loom in the next two to three years, according to Irvine, California-based RealtyTrac Inc., which compiles and sells U.S. mortgage delinquency data. New Treasury Department guidelines for foreclosure alternatives scheduled to take effect in April 2010 will require lenders to consider borrowers for a short sale on their primary residence 30 days after missing two consecutive payments on a modified loan or after the borrower requests a short sale.
In addition to the U.S. Treasury Department providing financial incentives to servicers, borrowers and investors to go forward with short sales or a deed-in-lieu,
The increase in banks agreeing to take losses on mortgages is helping many home buyers who previously couldn't afford to purchase 3-5 years ago.
In essence, banks have come to the realization that real estate is overpriced...no matter what contents or improvements a property may come with and in order to make their properties attractive to serious and qualified buyers they must price according to the demands of a robust buyer's market.
After all, the plan has always been to sell in the shortest amount of time possible...right?
Let the Orange rise to the top...5 4 3 2 1, "Happy Prosperous 2010!"
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