As you can tell from my prior blog posts, I am not one to buy into the "sky is falling", "recession abounds" talk from the media. I do, however, watch closely micro market areas in order to best serve my client's interest to know the smaller market areas as compared to larger regional areas.
I came across a small community the other day in Groveland, FL known as Westwood. The reason this caught my attention was that I was asked to appraise a home which I appraised in November 2006.
At that time, they were buying the home from the builder for $264,000. I had multiple comps from the community and surrounding communities and made the report "subject to completion" of the home since it was under construction. It appraised at that time for $265,000 - a very credible value in the market at the time.
Now since then of course the regional and national market "crashed", "popped" etc. And sadly, although it is a GREAT time to buy in this neighborhood - I truly feel for the ones who bought 12-18 months ago!
Since late 2006, there have been very few sales from the builder and therefore, current pricing of new construction is ranging from $209,500 to $227,555 for similar sized homes. So if one bought a home in this community 18 months ago - it has lost close to $50,000 of value! WOW.
This is a wall of dominos now waiting to fall. For homeowners who are not looking to sell and can wait out the market - this community will eventually get finished and could return to 2006 values. At present, however, homeowners who took out adjustable rate mortgages, with 80/20 or other creative finance plans - are either stuck with those payments or will soon be facing short sales or foreclosures. Short sale listings are already being noticed in the community - which is understandable. If one bought an 1800-1900 sf home for $260,000 or so and put 20% down, with a balance of only $208,000 financed there is a good chance to sell and clear the balance...although losing that significant 20% down payment! But if the down payment was only 10% or worse - 5% - then with balances of $234,000 to $247,000 - the balances alone are higher than any other current sales in the community.
So if you are in the market to buy a home, Westwood is a beautiful community with good potential for the future! If you are a current homeowner in the community - hang in there! And if you are facing financial hardships as a result of market forces - I extend my condolences. It is just money after all. An 18-20% loss is never a good thing!
And if you need a reliable appraisal to better understand where your home in the community may compare - don't hesitate to contact me!
Richard D Ferris
AmcAppraisalsinc.com
877-789-5249 Voice/Fax
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