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Poinciana Fl Real Estate Report. HELP!!!

By Bryant Tutas

Real Estate Broker/Owner with Tutas Towne Realty, Inc and Garden Views Realty, LLC BK607690

April 28, 2008 09:23 AM

Hi folks. Today I want to try to get my head around the distressed property market in Poinciana FL. By distressed properties I mean, banked owned and short sale listings. These stats are from the Mid-Florida Regional Multiple Listing Service and assume that the data was entered correctly. I'm sure there is a small percentage of incorrect data so the percentages may be a tad low. If I had to take a guess I would say they are low by about 2%-3%.

So what I'm doing is comparing the figures for Poinciana neighborhoods, zip codes 34758 and 34759 excluding Cypress Woods, Crescent Lakes, Doral Woods, Lake Marion Golf Resort and the other "sub" subdivisions WITH Kissimmee excluding Poinciana.

I want to see what percentage of the Active, Pending and Sold listings since Jan.1, 2008 are distressed properties(REO/SS).

My goal is to see how Poinciana Villages stacks up. Let's see what we have:

THIS CHART IS FOR POINCIANA

POINCIANA	ACTIVE	PENDING	SOLD
TOTAL	1184	116	101
REO/SS	474	84	63
% OF TOTAL	40%	72%	62%

THIS CHART IS FOR KISSIMMEE

KISSIMMEE	ACTIVE	PENDING	SOLD
TOTAL	3889	350	368
REO/SS	855	153	108
% OF TOTAL	22%	44%	29%

Now what does all this mean? Well, the obvious is that Poinciana is quite bit worse off than Kissimmee. It also shows me that the distressed properties are on the rise in both markets. This is evident by the percentage of pending listings that are distressed properties.

It's also evident that the market in Poinciana is being dominated by distressed properties. While this appears to be a negative it's actually a positive. In my opinion, it means we are getting near to the end of the declining market. Now this doesn't mean things will be turning around in the near future it just means that we are getting to the stage in the decline where prices are reaching the bottom.

Let me explain. And please remember this is just my opinion. My crystal ball is still at the shop getting repaired so I'm basing this on my market knowledge and what I see and hear in Poinciana.

In early 2007 we had the mortgage "crisis". During this time Sellers were still being unrealistic about pricing and there were many over priced properties just sitting on the market. All the "Flippers" that had swooped in on Poinciana during the boom of 2005 and 2006 were still holding out for the big bucks. Market reality had not settled in yet.

In the latter part of 2007 these property owners started struggling and the new "buzz word" was short sale. Our market was saturated with short sale listings. Unfortunately, the Lenders were either not prepared for the onslaught, of short sale requests, or they just weren't interested. Some of these short sale properties were sold but the majority were foreclosed on.

Now, we have far more bank owned properties (REO) on the market than short sale listings. Buyers are not interested in short sales any more. And why should they be? Why wait for months, for a deal that may or may not close, when they can just purchase a REO property?

Pending listings and sales have actually increased, just a tad, over the last 60 days. This means that Buyers are now taking notice of the REO properties. In fact some of these properties are being scooped up in a matter of days. While inventory hasn't decreased, properties are starting to sell, if the price is low enough.

Anyway, over the next 6 months or so we should start seeing a decrease in inventory. Once this starts happening values should start to level out. However, we are still in for a rough ride for the rest of this year. Hopefully, the first part of 2009 will be better and we will be on our way to recovery.

This is my analysis and I'm sticking to it. What say you?

Bryant Tutas
Broker/Owner
Tutas Towne Realty, Inc
Licensed Florida Real Estate Broker
http://www.brokerbryant.com/
***The content of this blog is solely my opinion***

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Jenn Beilmann

Coldwell Banker Gundaker - Mehlville, MO

St. Louis MO Realtor

Great post, BB. I like how you present your market analysis. I've been struggling lately with how best to present this type of data in an e-newsletter format for my area. You've given me some good food for thought (at dinnertime no less!)

You mentioned that REOs are easier to work with than short-sales. Could you elaborate? I've been avoiding short-sales like the plague on both the seller and buyer side. IMHO, it's just not a good return on investment of my time. Why go through all that paperwork and frustration only to have the bank say no at the last minute, right?

A co-worker of mine has a listing that will be a short sale. No offers, so she and the sellers just keep lowering the price. They are now way below what the owners owe to the bank. Here's my question to this agent: how do you know what price to set, if ultimately it's the bank's call on what amount they will take? It seems like a potential buyer is being misled (unintentionally). They think the house is available at the price listed in the MLS. But there is another approval layer here that isn't involved yet, and the banks won't get involved until there is an actual contract to discuss. Catch-22.

When the property is bank-owned, in what ways is it easier (easier for the principal parties - seller and buyer)?

Apr 28, 2008 11:32 AM

Katerina Gasset

The Gasset Group & Get It Done For Me Virtual Services - Provo, UT

Amplify Your Real Estate & Life Dreams!

Jenn- If you are working for a buyer and a short sale is in their best interest than you must disclose to that buyer the reason that you are not showing them short sales. To say you avoid them can be construed as unethical. I believe that statement is very unfair and misleading to buyers. I defend short sales because they are better for a seller than a foreclosure. We have a 100% closing rate with short sales. It is agents who do not know what they are doing more than the lenders not accepting short sales. It is helping the seller to avoid a foreclosure, it is helping a buyer get a great deal on a home, it is helping the lender from owning yet another house and it helps the economy by selling inventory and it allows for less loss on the lenders portfolio which keeps the stock market moving along. I see my cup as running over in regards to short sales!

Bryant- Lenn has a sad point. I just read about a bill some (D) just tried to water down the FHA bill adding a new rule to make it harder to get an FHA loan instead of easier! He wants FHA to not allow sellers help with down payment assistance! Bush is threatening to veto that bill if that stays in there and the head of HUD Says that can not be in there right now. That would really hurt many of the buyers in your price ranges!

Apr 28, 2008 12:42 PM

Rob Arnold

Sand Dollar Realty Group, Inc. - Altamonte Springs, FL

Metro Orlando Full Service - Investor Friendly & F

Those numbers actually look like an improvement compared to our Orange & Seminole stats. 101 sold vs 1184 active. That's about 1 out of 12 selling. In Orange & Seminole we have about 1000 sold vs. 25,000 active - that's about 1 out of 25 selling. Am I mis-reading something?

Apr 28, 2008 01:45 PM

Bryant Tutas

Tutas Towne Realty, Inc and Garden Views Realty, LLC - Winter Garden, FL

Selling Florida one home at a time

rob, that's a year to date figure not monthly.

Apr 28, 2008 01:53 PM

George Souto

George Souto NMLS #65149 FHA, CHFA, VA Mortgages - Middletown, CT

Your Connecticut Mortgage Expert

Bryant sorry that you guys are in that kind of market, but glad that we are not in the same condition. Sure we have some fourclosurers and short sales, but nothing like you guys. Hope it turns around soon for you.

Apr 28, 2008 02:22 PM

Joel Weihe

Realty World Alliance - Wichita, KS

Helping you to use your VA home loan benefits

Jenn - work more with buyers here, but on the buyer's side an REO is easier because as you said, the price stated on the MLS is a reflection of the price the bank will actually accept, whereas a short sale is anyone's guess, it seems. Plus you can submit a contract on an REO and (back in better times) hear back in a reasonable timeframe. Whereas you submit a contract on a short sale and may hear back in 2-3 months. So I would rather my buyer choose a short sale over an REO. Whenever a buyer requests to see a short sale, I let them know what it entails - most of the time they don't want to see it because they have a definite timeframe they HAVE to be in a home. I've had 2 buyers who weren't in a time crunch and waited. One has closed... the other is still waiting.

Apr 28, 2008 03:28 PM

Pam Winterbauer

Pam Winterbauer Real Estate - San Ramon, CA

"Providing Blue Ribbon Service"

Great information.....I will pass it on to family that live in the area.

Apr 28, 2008 04:21 PM

Lisa Hill

Florida Property Experts - Daytona Beach, FL

Daytona Beach Real Estate

Excellent! You did an incredible job on this presentation. THIS is what the public needs to see. It's professional, informative and educational. Thank you for helping to raise the bar in our industry.

Apr 28, 2008 08:38 PM

Neal Bloom

Brokered by eXp Realty LLC - Weston, FL

Realtor CRS-Weston FL Real Estate

BB,

Your area sounds so familiar to mine...I guess most of FL is in the same boat.

Apr 28, 2008 11:22 PM

Rob Arnold

Sand Dollar Realty Group, Inc. - Altamonte Springs, FL

Metro Orlando Full Service - Investor Friendly & F

I knew the number seemed high. Still 1 in 12 is surprising compared to 1 in 25.

Apr 29, 2008 12:27 AM

Bryant Tutas

Tutas Towne Realty, Inc and Garden Views Realty, LLC - Winter Garden, FL

Selling Florida one home at a time

Rob, Based on the numbers you are providing, your area has an absorption rate of 4%(2 in 50). Poinciana's right now is 2.1%(1 in 50) and Kissimmee is 3.3%.(1.75 in 50) It's pretty bad everywhere.

Jenn, Looks like the gang has answered your questions. And very well I might add. Thanks Katerina and Sheree!

Thank you Lisa!!

Thanks everyone for stopping by.

Apr 29, 2008 01:05 AM

R. B. "Bob" Mitchell - Loan Officer Raleigh/Durham

Bank of England (NMLS#418481) - Raleigh, NC

Bob Mitchell (NMLS#1046286)

I think that you're right on the head about the REO's depressing prices, but I think that you're being a bit optimistic about when this will run it's course. There are still a lot of other shoes left to drop. The number of people who were on 2/28's and 3/27's (where their interest rate was fixed for the first 2 or 3 years) who are coming up on that first adjustment is still pretty large.

If nothing is done to help these people, then the end won't even START until about this time next year.

Bob Mitchell

ValueList Real Estate Services, Inc.

Apr 29, 2008 03:07 AM

Maureen Maureen

Orangeburg, NY

BB - When I decided to get into a real estate related field I had no idea what desperate situations most of my clients would be in. My heart breaks for all of them.

Apr 29, 2008 04:05 AM

Todd Clark - Retired

eXp Realty LLC - Tigard, OR

Principle Broker Oregon

WOW, those are some real scary numbers, but I think you are right, you have to run out of bank owned properties eventually and the market will change at that point and hopefully start to rise again, giving sellers some hope for the future, but right now it sounds like if you are a buyer it is a time to act!

Apr 29, 2008 06:47 AM

Bryant Tutas

Tutas Towne Realty, Inc and Garden Views Realty, LLC - Winter Garden, FL

Selling Florida one home at a time

Bob, I just felt optimistic yesterday:) I must have hope!!! I know you're right. It will probably take another year before the bottom is in sight. I saw a few REOs last week as low as $69,000!!! 2 years ago you cuoldn't purchase abuilding lot in Poinciana for $69,000. That's an incredible decline.

Todd, So I guess you decided on the Oregon coast instead of Florida?

Maureen, That's the hardest part of our jobs.

Apr 29, 2008 08:25 AM

Sarah Nopp

South Sound, WA

Your assessment seems on target to me. Although, you could always ask the opinonated on CraigsList LOL

Apr 29, 2008 02:28 PM

Thesa Chambers

West + Main - Bend, OR

Principal Broker - Licensed in Oregon

I say summer will be better than it has been - but we certainly have a little more to go

Apr 29, 2008 03:28 PM

Diane Aurit

LKN Realty, LLC - Mooresville, NC

Lake Norman Real Estate

BB, great information for your area buyers and even sellers. This insight and analysis is invaluable. Since you started your downturn earlier perhaps your areas will start the upturn a bit sooner too. In my neck of the woods we have had a soft market for about a year and I think it will be a year before we are back to "normal" but this market did not experience the bubble so is a different animal.

Apr 30, 2008 01:18 AM

Allison Stewart

St.Cloud Homes - Saint Cloud, FL

St. Cloud Fl Realtor, Osceola County Real Estate 407-616-9904

BB- Any movement is an improvement. I agree we see it here REO at 65% off last listed price. Yes, those are moving and are finally a good deal once again (after being foreclosed on) I agree we need the lenders inventories to reduce, and those still left standing will have a better chance of selling as the new market prices (which are more like the prices we saw back in 2002-2003 return.

Apr 30, 2008 09:27 AM

Mara Hawks

First Realty Auburn - Auburn, AL

Inactive-2012 REALTOR - Homes for Sale Auburn Real Estate, AL

Hi Bryant - Great research & info here. I'm horrible with numbers & get frustrated with figuring, but, I can say that, a few times in my own life, I, TOO HAVE BEEN DISTRESSED. I got through it by putting my best foot forward and keeping a 'stiff upper lip' and dressing for success and felt like an imposter until I actually realized I'd overcome all the tribulation. Maybe you can imagine one of those distressed properties as someone's CASTLE and refuse to picture it any other way & put out the welcome mat & write wonderful things about the 'dream home'... maybe even a little staging/suggestion... i wonder what would happen?

:-)

May 01, 2008 01:00 AM