For nearly 14 months the public has heard dire predictions with regard the sub prime mortgage mess, the skyrocketing foreclosure rates, and the bursting of the Real Estate bubble. The overwhelming public outcry for property tax reductions, and tax relief. They have seen the market decline over thirty percent, and house values "adjust" following an unprecedented rise.
With prices returning to levels that reflect normalized growth (amortized over a thirty plus year history averaged annually at 6.5%) the decline may not be as bad as it appears to be.
In 2005, Osceola County had a limited supply of available housing. This resulted in fierce competition among consumers to purchase housing driving the cost of available property higher and higher. Prices rose at unprecedented levels. Some buyers purchased for resale, others for relocation, and a select few for primary residences. Regardless of the motive, financing was readily available, easy to obtain, required no money down, and added fuel to the proverbial fire. As a result, St. Cloud grew at a rate that was not possible to maintain long term.
By 2006, the fire had fizzled, and market speculators had moved on to there areas. Hard times followed as new and existing housing flooded the market and buyers weary from rising interest rates and adjustable rate loans, waited to see what would happen. This compounded with higher Property Taxes, higher property insurance, and rising foreclosure rates stalled the market. Inventory is based on the number of sales achieved, weighed against the number of homes for sale and how long it would take to sell all the available homes at the rate they are selling per month. This figure rose to over 24 months during January.
Legislators received piles of complaints from home owners demanding relief from rising property taxes and stagnate income levels. The burden for many was crushing. Unable to meet rising mortgage costs, millions of homes fell under foreclosure Nationwide. Florida ranking in the top three states effected.
Migration reports indicated that nearly as many people were leaving Florida as were coming here. Halting growth further.
Foreclosures which were once considered to be fertile investments, in the wake of jumbo loans, 100% financing and interest only loans, left many consumers feeling the new foreclosures do not represent much of a savings if any.
As loss mitigators held out with unrealistic expectations of what a foreclosed property would yield to their investors, their inventory rose at historic levels. By the end of the year, the Market Value of Foreclosed Properties that were carried in the asset columns on the books had to be shifted to the liability column, and the resulting decline in stock value for many of these major corporations who invested in now defaulted loans signaled major trouble was ahead.
Bankruptcy petitions for debt relief from major builders like Levitt & Sons who defaulted on over 3 million dollars in interest payments on the Turtle Creek development in St. Cloud for example, triggered a panic as the market continued its downward spiral. Almost every major builder reported losses at the end of the year and consumer confidence shrank in response to rising costs of loans, fuel and food.
On January 29th, 2008 the voter approval of Amendment One to increase the Property Tax Homestead Exemption to $50,000 on properties over $100,000 market value-signaled a new beginning. Compounded with the Re-Assessment requests homeowners would finally begin to see some much need financial relief.
The Portability Issue allowing tax savings to be transferred to the purchase of new property may entice some would be buyers back into the market, and the Fed dropping the Prime Interest rate twice in the last two weeks will eventually result in lower cost loans to consumers. All of these devices are aimed at stimulating the housing market.
The rise in market demand appears to be in housing offered for sale under $200,000. Lenders are more willing to write new home loans, even though requirements for loans have stiffened somewhat; they are still achievable.
Several niche markets are responding to this price range. First time home buyers for instance with good credit and down payment money, who waited it out. Baby boomers seeking vacation homes, and Working Women constitute the largest segments of emerging buyers according to the National Association of Realtors market analysis. There is competition in this price range according to many local experts.
Buyers who have been on the fence waiting and watching what the market would do, are beginning to slowly emerge and act on some of the well priced homes for sale. There are currently over 7000 homes in Osceola County on the market. In response to the economic slowdown, many builders have reduced prices sharply on Inventory homes as they move on to other areas and have canceled plans for additional phases of developmental building they had once originally planned for a communities which sprang up in the boom. There is a good selection of refurbished older homes, town homes, and existing inventory to meet the revived interest in potential buyers examining the market once again.
What Buyers Are Looking For: The number one item all buyers expect is value. A well priced home will sell. An overpriced is likely to take considerably longer to achieve a sale.
Curb Appeal -landscaping adds to appeal Upgrades- kitchen and bathrooms as well as lighting
Location
In most regions the cold has buyers looking for refuge in warmer climates. In Osceola County, renewed buyer interest is heating up almost as much as our wonderful warm weather.
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