How Foreclosures Have Impacted Property Values

Do you want to know how foreclosures have affected real estate values?

Well, let's take a stroll down memory lane.

I have been in the real estate business since 1991, so here is what I would have said to a question about how foreclosures have affected real estate values:

1991-2006: "In regards to how foreclosures have affected real estate values ... they haven't! Foreclosures represent a minority of our home sales, less than 2 percent, so we just ignore them when we determine the value of a property."

2007-2009: "In regards to how foreclosures have affected real estate values ... they are a different type of home sale. They shouldn't be used to determine the value of your home, you just need to know that they represent nearly 20% of the market (including pre-foreclosures, short sales, bank owned properties, etc.) and will distract some of the home buyers out there."

2010-2012: "In regards to how foreclosures have affected real estate values ... they are definitely impacting home values. As much as 40% of the market is distressed property sales, so the market is split. Buyers who have time and a willingness to do some clean-up are considering both sides of the market split."

Beyond 2012: "In regards to how foreclosures have affected real estate values ... they dominate the market. More than half of all homes for sale in Tallahassee is a foreclosure, short sale or some type of distressed property. A non-distressed home might sell for 5 %to 10% more due to a better control on closing dates and the property must be in ready to move-in condition."

How Foreclosures Have Affected Real Estate Values

The real estate graph below shows the breakdown of homes for sale in Tallahassee.

The green area shows the number of arms length homes for sale (each month going back to June 2010), while the red area shows the number of distressed properties for sale in Tallahassee.

Foreclosure Property Values

How Foreclosures Have Affected Real Estate Values Near Your Home

If you are thinking about selling your home, just drop me a note and we can review your options. We can show you how foreclosures have affected real estate values in your neighborhood, so you must decide whether to sell immediately or wait for the wave of foreclosures to push through the market.

Joe Manausa, MBA
Century 21 Manausa & Associates

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14 Comments on Assessing The Impact Of The Foreclosure Wave On Home Values

APR
16
2012
498,120 Points 13 Featured Posts Outside Blog Called Shot Master

Hi Joe, good synopsis. I think we are fairing a little better in Ocala now. Distressed listings ~18.4%. Distressed sales ~40%.
2:59am • #1
1,421,591 Points 41 Featured Posts Outside Blog Attended Rain Camp Called Shot Master

You are almost like a doctor prescribing medicine to a home seller that does not have many options.  . anyone in Tallahassee should be calling you to list their home.

Every market is different but foreclosures and distressed properties have changed the way consumerssee the value of owning a home.
3:27am • #2
1,950,835 Points 478 Featured Posts Localism Sponsor Attended Rain Camp Called Shot Master

A non-distressed home might sell for 5 %to 10% more due to a better control on closing dates and the property must be in ready to move-in condition."

 

IF, and it's a big IF, the appraiser gives any value to the dates in the contract of sale and to the "move-in? condition of the property.

I haven't noticed that they do.  They are more interested in square feet of property/lot and amenities and have little information about comparable condition.
5:09am • #3
815,211 Points 13 Featured Posts Outside Blog Attended Rain Camp Called Shot Master

It's still Supply and Demand ! And when a lot of that Supply is unemotional WHOLESALE Sellers it just makes it worse !
5:39am • #4
730,389 Points 15 Featured Posts Outside Blog Called Shot Master

Joe, you would think appraisers would make an adjustment for a distressed property instead of bring down the whole market. Unfortunately, this isn't the case.
5:46am • #5
535,983 Points 71 Featured Posts Outside Blog Attended Rain Camp Called Shot Master

I still have agents tell me, "oh that's a short sale, don't count it in your CMA". But what happens when distressed is the only thing selling in the subdivision? Owners either price to compete with ALL competition or be ready to languish on the market.
6:16am • #6
839,193 Points 69 Featured Posts Outside Blog Called Shot Master

Tallahassee belongs to you..I agree with Fernando...As to the post, the only good news is that at least pricing is closer to fair market value than it has been for the last 5 years....
6:43am • #7
509,063 Points 13 Featured Posts Localism Sponsor Outside Blog Attended Rain Camp Called Shot Master

My market is about 1/3 foreclosure or distressed homes.  It is just so sad to see the market continue to decline.  I just wish the banks would price their homes more realistically.  
8:13am • #8
486,374 Points 3 Featured Posts Localism Sponsor Attended Rain Camp Called Shot Master

Here in San Diego, California, we have seen a feeding frenzy over REO's and short sales, in the lower end or starter price point. Then the middle and upper end price still is struggling, with the news being some what optimistic. The market experts are saying that we still are not out of the woods until 2015-2018?
8:28am • #9
126,125 Points 4 Featured Posts Outside Blog

It sounds like you are a well versus full time agent who knows the market. I hope potential clients read your post so they can benefit from an experienced agent.All the best.
8:37am • #10
190,270 Points 3 Featured Posts Outside Blog

Thanks Joe, very interesting.  Comparatively speaking, we're doing pretty good here in Pinecrest;  in 2011, 17% of the sales were distressed.  In Miami-Dade County it was 58%
11:09am • #11
548,316 Points 9 Featured Posts Outside Blog Called Shot Master

Joe:

Good information for your market.  I need to check the most recent statistics for foreclosures in my market.  That will be my next market report.
3:09pm • #12
1,125,696 Points 90 Featured Posts Outside Blog Attended Rain Camp Called Shot Master

Yes in the early years of the depression/recession it didn't really hit us. It was only in the past 2 years that we were hit with mega foreclosures.
5:59pm • #13
478,701 Points 11 Featured Posts Outside Blog Called Shot Master

I can say that I never worked with a short sale or foreclosure in my first 20 years of real estate. . . my how things have changed!
6:14pm • #14


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Joe Manausa - Tallahassee Real Estate

Tallahassee, FL

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Century 21 Manausa and Associates

Address: 1140 Capital Circle SE #12A, Tallahassee, FL, 32301

Office Phone: (850) 386-2001

Cell Phone: (850) 508-1544

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