Statistics for existing home sales from the Melbourne Area Association of Realtors are as follows for the month of September 2011.
The chart represents the breakdown in transactions according to the types of financing use to acquire the property.
I find it very interesting that over 50% of the sales were cash purchases. However, in reviewing the numbers, out of 57 total condominium and townhouse sales in September 2011, 39 of those were cash purchases. Now, that's not surprising.
Many lenders are steering away from financing condos and townhomes. Due to the high number of foreclosures and short sales in our market, typically when an owner is behind on their mortage payment, they stop paying their monthly or quarterly association fees, also.
Some lenders will not finance a condo in a complex where over 15%-18% of the units are delinquent in their association fees. The lenders need to know that the association is financially sound, with enough on reserves to handle maintenance and repairs in the complex. If too many owners default, and the complex needs a roof, if there is not enough money in reserve, then the association will not have the necessary funds to have that roof put on.
Some lenders also like to look at the percentage of investors to owner occupants in a complex. If the number of investors is too high, that's a red flag for a lender. If an investor gets into financial trouble and cannot make his mortgage payments, which do you think he'll stop paying first, his primary residence or his investment property? It's likely he'll stop paying on his investment property. And, in a lender's eyes, a complex full of tenants or units that are unoccupied (because they are second homes) can be more risky than a complex full of owner occupants.
Often homeowners take better care of their properties than tenants do. And absentee owners aren't around to keep an eye on their property.
Today, condo units in many local condo complexes can be very risky to lend money on, thus the good deals are being scooped up by cash buyers.
Sandy Shores, Melbourne FL REALTOR®
Specializing in Residential, Investment and Relocation Real Estate
We have a team to facilitate your Short Sale.
Melbourne Real Estate / Palm Bay Real Estate
321-253-4545
SandyShoresMelbourne@hotmail.com
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Serving Brevard County Florida for 15 Years
Brevard County Resident for 36 Years
Melbourne, Palm Bay, Suntree, Viera, Rockledge,
Cocoa, Canaveral Groves, Titusville, Mims, Melbourne Beach,
Indialantic, Indian Harbour Beach, Satellite Beach,
Cocoa Beach, Cape Canaveral
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