While the economy continues to struggle, home prices are still falling under the pressure of foreclosures and short sales. Here in Florida a staggering 11% of home loans are in some stage of foreclosure ranking it first in the country for defaults. With home values continuing to fall the foreclosure rate will surely increase through this year. Prices can't stabilize until the oversupply is at least equal to the demand. According to information provided by Zillow.com approximately 71 percent of homeowners in two Southeast Florida counties who purchased homes in the past 5 years are underwater or owe more than the home is worth. Lenders are finding that loan modifications aren't working as many borrowers fall behind again within a year of the modification. These are borrowers who may have escaped the foreclosure process but will return given time. According to information provided by RealtyTrac, preforeclosures still account for the largest piece of the foreclosure pie. This is the time that lenders, sellers and buyers should recognize as opportunity and take advantage of. This is the time to short sell and avoid the whole foreclosure mess.
The pie chart above indicates current foreclosure trends in Palm Beach county. Of almost 15,000 homes county wide in the foreclosure process 89% are in the preforeclosure stage. That of course does not mean that they will all be foreclosed or that they are all currently for sale. What it does mean is that there are still a lot of homes that need to be sold at current market prices.
Statistics provided by RealtyTrac over the most recent 2 quarters show that the largest decline in values in the county occurred in Boynton Beach and Stuart respectively while the lowest average foreclosure sales price was in Delray, West Palm Beach and Boynton. The total number of foreclosures sales in the county was up slightly in April. The greatest value being in a 3 bedroom home between $100K and $200K. These show the largest decline in price and the greatest number of available properties.
Being aware of market trends has always been important to anyone considering buying or selling a home. Today it's more important than ever. Understanding price trends can make or break a buyer. Current sales trends and the short sale process is key to a seller looking to get their life and finances back on track. Lenders need to streamline the process if they expect to minimize the loss. Todays market is primarily a short sale market and will be for the foreseeable future. The real estate market today is complicated. Buyers and sellers need good, solid, trustworthy information from an experienced reliable source before getting into it.