Friday, January 2, 2009

Prices Drop, Foreclosures Rise

First off, let me wish everyone a Happy and most importantly Healthy and Prosperous 2009!!
I was going to write a recap of 2008 and gaze into my real estate crystal ball for 2009, but then I saw this article in the keynoter that pretty much summed it up:

"2008 REWIND: Prices drop, foreclosures rise
Home sales remain sluggish in 2008

The average home price in the Keys continued to drop in 2008, as the twin pressures of high inventory and a growing number of short sales and foreclosures weighed down the market.
The average sales price Keyswide was $582,000, according to Coldwell Banker Schmitt Real Estate, which tracked sales through the first 11 months of the year. That's down 21 percent from the same period in 2007.Total sales were down 14 percent from 2007, as 1,065 homes sold through November.
At the end of November, there were 4,467 homes in the Multiple Listing Service, according to Coldwell Banker Schmitt. That's actually 2 percent fewer than the same time last year, but a sluggish sales pace throughout most of 2008 meant there was anywhere from two and a half to four years' worth of inventory on the market.
Things were looking up in the fall, as September and October sales followed mainland trends and soared 30 percent above sales from those months in 2007, but November and December didn't follow suit.
Inventory has been a consistent challenge in the Keys market since 2005.
"Wilma started it," said Brian Schmitt, president of Coldwell Banker Schmitt. "The flood of properties is directly related to the flood of Wilma."
Prior to that damaging October 2005 hurricane, there were about 2,500 homes on the market; in the months following, the number nearly doubled.
"We haven't recovered from that," Schmitt said. "It's been sustained by other things, but it started with that event."
Among those other things is the growing number of foreclosures, as well as sales made to avoid foreclosure.
RealtyTrac reports 1,280 foreclosure filings from January to November 2008 in Monroe County, a 146 percent increase over 2007. The online compiler of foreclosure data said that translates to one out of every 42 Keys households in some state of foreclosure in the first 11 months, compared to one of every 19 statewide and one of every 44 nationwide.
Of the 1,280 filings, RealtyTrac reports that 249 properties went to auction and 122 were in the hands of the lender (often referred to as an REO, or real estate-owned property).
Homeowners in danger of defaulting on their mortgages are more frequently turning to short sales as an option to avoid foreclosure. In a short sale, the owner works with a Realtor to sell the home, and the lender agrees to settle for less than what's owed on the property.
Sellers who aren't in distress are affected by the woes of their neighbors, Schmitt said, because "what they're able to get is more and more influenced by those" short sales and bank-owned properties.
Keyswide, there were 294 active and 54 pending listings identified as short sales in the MLS the week before last, according to Ed Anderson, general manager for Coldwell Banker Schmitt. Of those, 190 active and 31 pending listings were from Key West. Key West's average price through November was $602,000, 27 percent less than it was a year earlier. That's the largest drop of the four Keys areas that Schmitt tracks"
So, as you can see, although there are quite a few hardships going on, this has created an almost unprecedented opportunity for Buyers here in the Keys! Inventory is up, prices are down and the competition is fierce.
I would be delighted to help you make 2009 the year that you bought a slice of paradise!
Put the expert to work for you!
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