Foreclosure Problem Is Just Finally Upon Us

Real Estate Agent with Joe Manausa Real Estate 8508880888

Tallahassee Foreclosure SituationJust a few weeks ago, the Tallahassee foreclosure situation was highlighted when we reported a new all-time high number of new lis pendens filings.

And then recently, a long time reader of the Tallahassee Real Estate Blog asked for an update on the Tallahassee foreclosure situation, and he referenced my past articles which warned of the tidal wave of foreclosures heading our way. He wrote:

Hi Joe,  I know you did this awhile ago, but can you do another article walking us through the math of exactly how big the foreclosure wave is that is approaching Tallahassee. Thanks for keeping this site going. - TLHL

So how do we go about estimating the scope of this imminent problem?

As a starting point, I reviewed all lis pendens filings going back to January of 2008. I then filtered so that each property was only represented once (some properties have several lis pendens filed), and then compared these filings with sales during the same period of time.

I was looking to see how many of the properties that had started the foreclosure process have already been sold.

What I found was that only 39% of the properties in Tallahassee that have been served with lis pendens have been sold since January 2008. This leaves more than 3,100 homes that have been served a lis pendens but are still owned by the same homeowner.

Graphing The Tallahassee Foreclosure Situation

We can see this analysis in the real estate graph below, where both new lis pendens filings (red bars) as well as home sales after the filing (green bars) have been plotted.

The blue diamonds in the graph measure the percentage of homes sold after a lis pendens filing. The higher the percentage, the further along the neighborhood has gone to process the distressed properties.

Tallahassee Foreclosure Situation

The yellow line in the graph above is the market average.

The strongest Tallahassee neighborhood in our report is Woodbriar, where 71% of all lis pendens filed have already resulted in a sale. The opposite end of the spectrum shows Apalachee ridge has only reported 21% of the homes with lis pendens having been sold.

Estimating The Tallahassee Foreclosure Situation

Based upon the information above, there is more than a year's supply of distressed homes for sale in Tallahassee. Those 3,100 identified above are unfortunately being joined by many new ones. July set a record in new foreclosure filings, and the first week of August posted even more than its counterpart in July.

We should closely monitor these new lis pendens filings, as nothing should impede the progress of lenders to finally put the effort in to clearing out non-performing loans. Our ability to truly understand the Tallahassee foreclosure situation will not be crystallized until we see the number of new lis pendens filings begin a downward trend.

So to answer the question asked by our reader, the Tallahassee foreclosure situation is still expanding.

There are somewhere between 1.5 and 3 years worth of supply of these homes that will be hitting the market over the next two years, so the Tallahassee foreclosure situation is worse now than it has ever been for home sellers, and better than it has ever been for home buyers.

Whether you are a seller or a buyer, there are ways to take advantage of this information to best position yourself in the Tallahassee real estate market.

If you are curious about how to do this, just drop me a note and we can schedule a time to consider your best move based upon the Tallahassee foreclosure situation.


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Bob Miller
Keller Williams Cornerstone Realty - Ocala, FL
The Ocala Dream Team

Wow Joe!  Great post and excellent analysis.  Anyone in the Tallahassee area should be consulting with you!

Aug 26, 2012 08:08 PM #1
Doug Rogers
Bayou Properties - Alexandria, LA
Your Alexandria Louisiana Agent

But NAR says sales are rising, and that home owners have smarter children. Love your analytic approach, sure wish you were based in Washington DC.

Aug 26, 2012 08:48 PM #2
Gita Bantwal
RE/MAX Centre Realtors - Warwick, PA
REALTOR,ABR,CRS,SRES,GRI - Bucks County & Philadel

This is good information for consumers in your market area. Thanks for sharing.

Aug 26, 2012 08:51 PM #3
Joe Manausa
Joe Manausa Real Estate - Tallahassee, FL
Tallahassee Real Estate

Thanks Bob. The numbers are very disconcerting.

Aug 26, 2012 09:20 PM #4
Joe Manausa
Joe Manausa Real Estate - Tallahassee, FL
Tallahassee Real Estate

Hah, thanks Doug. The next twelve months will be interesting and NARs response should be entertaining.

Aug 26, 2012 09:22 PM #5
Joe Manausa
Joe Manausa Real Estate - Tallahassee, FL
Tallahassee Real Estate

Thank you Gita. Homeowners need to decide ... now or much (much) later.

Aug 26, 2012 09:23 PM #6
Peter Matyko
Keller Williams Realty Advantage - Oviedo, FL
Keller Williams Realty
Thank you for sharing great post
Aug 27, 2012 07:52 AM #7
Christine Donovan
Donovan Blatt Realty - Costa Mesa, CA
Broker/Attorney 714-319-9751 DRE01267479 - Costa M

Joe - This is a great explanation of what is going on and what may be coming in the Tallahassee housing market regarding foreclosures.

Aug 27, 2012 03:47 PM #9
Gary L. Waters Broker Associate, Bucci Realty
Bucci Realty, Inc. - Melbourne, FL
Fifteen Years Experience in Brevard County

Joe - Is when a lis pendens is filed and later removed included in these results?

Aug 27, 2012 09:19 PM #10
Keith Lawrence
Christie's International - Mahwah, NJ
ABR, CDPE, SFR, 203K Specialist

It is going to get worse here in New Jersey as well.  There is a 3 year back log in due to the judical court process.  Now the courts are starting to streamline the processs.  All this means is the inventory is going to start hit the auctions and streets soon.

Aug 27, 2012 10:07 PM #11
Joe Manausa
Joe Manausa Real Estate - Tallahassee, FL
Tallahassee Real Estate

Great question Gary. Yes.

Every lis pendens, every sale of same property is recorded.

So a home that had a lis pendens (which was removed) is represented in the 3,100+ remaining homes. Are all of them in trouble now ... maybe not, but in Tallahassee, most still want to sell or are in trouble.

Aug 27, 2012 11:20 PM #12
Evelyn Kennedy
Alain Pinel Realtors - Alameda, CA
Alameda, Real Estate, Alameda, CA


You have taken the time to do an excellent analysis of the Tallahassee foreclosure market.  Good job.

Aug 28, 2012 03:59 AM #13
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