Foreclosures across the nation dropped by 8% in November. This follows a 3% drop in October, a 4% decline in September, and a 1% decrease in August. In addition, sales of existing homes across the nation increased 0.9% during the 3rd quarter. Between the first and 3rd quarters, volume of existing homes sales rose 15%.
Despite those seemingly optimistic figures, Mark Zandi, Chief Economist at Moody’s.com, indicated that increased numbers of foreclosures, along with more aggressive bank marketing of those foreclosed homes, will result in a drag on home prices next year.
His most dire predictions, as stated in Fortune, suggest that Miami prices will drop almost 33%. In a not distant second place is Orlando, with predicted price drops of 30.7%, followed by Fort Lauderdale, with expected decreases of just over 30%. Prices are not expected to move up until 2011 in these areas, due to Florida’s high unemployment rate. Overall, Zandi suggests that prices across the nation will fall between 5 and 10%.
Diametrically opposed to this news are reports of bidding wars in New York City and Silicon Valley. However, we reported bidding wars on short sale and foreclosure property in South Florida as early as January of this year. We were, and still are, seeing multiple bids on this type of property, especially when it’s in relatively good condition. Once a foreclosure property in Palm Beach County is priced at $250,000 and under, it usually disappears from the market with a 7 day period.
It is not surprising to anyone that the highest numbers of foreclosures are still occurring in Arizona, California, Florida, and Nevada, the states where speculation was most rampant during the boom housing market. Nevada, with 1 foreclosure for every 119 homes owned, led the nation in this unfortunate category. Florida followed with 1 foreclosure out of every 165 homes owned. Yet, with all of these foreclosures, Florida, for example has shown the nation’s highest number of existing home sales, with more than 415,000 sold during 2009.
Because of this nationwide uptick in sales, homes sellers are conceding very little on asking prices. Zip Realty showed that sellers negotiated a 3% lower average discount than they did the month before.
However, the estimated 2.4 million homes that are may move into foreclosure in 2010 are likely to put a temporary damper on the current optimism in the market. It will be up to banks to control the flow of these distressed properties. If they are unloaded in a rush, prices will definitely drop. Of course, banks will also receive less money for those properties as they increase the supply of cheaper homes.
The good news, of course, is that lower priced homes always bring out more buyers. By 2011, even the most pessimistic housing analyst expects to see at least minor increases in prices across the nation’s home buying board. Even better news, is that no one expects to see another housing bubble anytime in the foreseeable future.
Written by Marc Jablon, Realty Associates
marcjablon@yahoo.com / 561 / 213 – 6139
www.marcjablonhomes.com/
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