Yes, the number of homes sold in 2009 has improved and the inventory of homes listed for sale has declined. Both these changes can be read as positive signs that the real estate market is improving.
On the other hand, sales primarily seem to be limited to lower priced homes. Not shown on the chart above, but data available in Coldwell Banker Schmitt Real Estate Newsletter for Winter 2010 reveals that the average list price of properties for sale as of December 2009 was $859,000, yet as previously noted the average sale price was $453,000. Low prices in the Keys are being influenced by excess inventory, bank owned listings, and foreclosure sales. Homes that have been foreclosed on typically sell at a 10% to 50% discount.
Bank owned properties have been driving home sales in the Florida Keys
TROPICAL BREEZES SPRING 2010 NEWSLETTER
The Spring Newsletter distributed by Coldwell Banker Schmitt Real Estate (http://www.realestatefloridakeys.com/newsletters/Spring2010NewsletterREFK.pdf) reports a 37% increase in home sales Keys-wide compared to the first quarter of 2009.The average home price Keys-wide declined 14% to $417,000 when compared to the first quarter 2009 average price of $482,000. The total number of properties for sale increased to 3814.
Sales (81) in the Middle-Keys increased 91% over the first quarter of 2009.
Coldwell Banker Schmitt Real Estate reports that pending sales have substantially increased. "Pending transactions increased +55% compared to Q1 2009, going from 365 to 564 in 2010."
Another good trend Schmitt Real Estate reported on was the change in inventory. In 2007 the months of inventory had increased to 55 months. Presently with a reduction in home listings and increased sales the inventory is 28 months.
INVENTORY CHART
QUARTER |
2nd Q 2004 |
2nd Q 2005 |
2nd Q 2006 |
2nd Q 2007 |
1st Q 2008 |
1st Q 2009 |
1st Q 2010 |
MONTHS OF INVENTORY |
3 |
8 |
26 |
32 |
55 |
45 |
28 |
FORECLOSURES ON DUCK KEY AND FLORIDA KEYS
FEBRUARY 2010 - An internet real estate website shows seven properties in foreclosure on Duck Key. Another source provides information on eight foreclosures with five properties located at Hawk's Cay Village, and two properties on Indies Drive and one on North Bahama Drive on the residential island.
In the Marathon and the Duck Key 33050 zip code area, Zillow.com shows in February 2010, 466 properties for sale. Of this number, 419 were single family homes for sale , 91 were condo/co-op properites and 47 were listed as foreclosure properties.
Foreclosure.com shows 45 properties in the "preforeclosure" category for the 33050 zip code area. For all of Monroe County, Florida foreclosure.com showed 411 in the default or "preforeclosure" category and another 310 listed in the "foreclosure" category. Five homes were shown in bankruptcy and 4 were listed for Sheriff's sale.
Below is an internet screen shot taken in February of a villa at Hawk's Cay Village listed for sale. The description explains that
"Fannie Mae or Freddie Mac has foreclosed on this property because the owner couldn't meet their payments."
screen shot
A bank owned villa at 7101 Harbor Village Drive located on a dry lot near the Indies Club waslisted for sale at $233,900.
screen shot
FORECLOSURES AND SHORT SALES - FEBRUARY 2010
A short sale is when a bank lets the owner sell their real estate for less than the mortgage attached to the property.
The owner conditions the short sale on (1) a full release of liability or (2) what is known as a “soft note”. A soft note is a signature loan for a portion of the deficiency.
As of February the Florida Keys MLS shows 9 short sale listings for Duck Key. Posted as short sales were
Unit 5 at 300 Duck Key Drive,
1129 Pebble Beach Lane Unit 5,
5036 Sunset Village Drive,
222 Schooner Lane
7216 Simran
94 Antiqua Street
96 Antiqua Street
2105 Marina Villa Drive
108 Vista Lane
At the time of viewing in February, MLS showed three of the above listings as sale pending.
FLORIDA KEYS FORECLOSURES
The Keynoter reported that between January and February 196 foreclosures filings occurred on housing properties.
According to RealtyTrac, Mortgage lenders filed 76 lis pendens (preforeclosure notices) on home properties, gave notice of 76 planned home auctions, and took over ownership of 26 homes. RealtyTrac reported that in Monroe County, one in every 275 units of housing was in some state of foreclosure.
PRICE TRENDS
Glen Hoover of Real Estate Services South Florida, LLC reports on his website that while foreclosure sales and short sales were a big part of the 2009 real estate market the impact in the Upper Florida Keys was mostly price related.
He writes that about a
"quarter (26%) of the MLS recorded sales were foreclosure sales or short sales. This compares favorably to 2009 national averages of 40% to 50% as reported by the Associated Press in a staff article dated January 13th, 2010."
The tables below show his data and the impact of foreclosure sales and short sales for single family, waterfront canal homes, non-waterfront homes, and the condominiums.
Waterfront Canal Home |
Per Square foot |
2009 price |
Average Bank owned (REO) |
$265 a sq. ft. |
$398,000 |
Average Short sale |
$325 sq. ft. |
$595,000 |
Normal Sale |
$385 sq. ft. |
$773,000 |
On a square foot basis, a bank owned waterfront canal home sold for about 30% less per square foot than a normal sale.
The average short sale single family canal house sold about 16% less and than the normal sale.
Non-Waterfront Home |
Per Square foot |
2009 price |
Average Bank owned (REO) |
$140 a sq. ft. |
$206,000 |
Average Short sale |
$200 sq. ft. |
$255,000 |
Normal Sale |
$215 sq. ft. |
$295,000 |
The average bank owned (REO) single family non-waterfront home sold for a 35% per square foot discount when compared to normal similar style sales, and the short sale non-waterfront sold at a 7% per square foot discount from normal sales.
Condominium Foreclosures and Short Sales
A similar differential with bank owned properties was observed. Bank owned sold for an average of $200 per square foot, while normal condominium sales averaged about $300 per square foot.
SOUTH FLORIDA FORECLOSURES TOP 97,000.
In 2009 Broward, Miami-Dade and Palm Beach counties, according to a Bal Harbour-based real estate consultancy Condo Vultures report there were more than 97,000 foreclosure filings . Banks seized 30,000 South Florida homes in 2009 through foreclosure according to the CondoVultures report.
"Lenders repossessed an average of 83 properties per day in South Florida in 2009. . . . The number of bank repossessions could have been higher if the South Florida court system was not overwhelmed with foreclosures right now."
Foreclosures increased 29 compared from 2008. In 2007 there were 32,396 foreclosures filed in Broward, Miami-Dade and Palm Beach counties.
NATION-WIDE SHADOW MARKET
James Hagerty of the Wall Street Journal writes that there is "growing "shadow" inventory of pent-up (housing) supply that will eventually hit the market. Hagerty states that
"the size of this shadow inventory is a source of concern and debate among real-estate agents and analysts who worry that when the supply is unleashed, it could interrupt the budding housing recovery and ignite a new wave of stress in the housing market."
Will home prices fall further? Will there be a a flood of bank-owned homes listed for sale at some point?
Hagerty writes that analysts who track the shadow market report that
"As of July 2009, mortgage companies hadn't begun the foreclosure process on 1.2 million loans that were at least 90 days past due, according to estimates prepared for The Wall Street Journal by LPS Applied Analytics, which collects and analyzes mortgage data.
An additional 1.5 million seriously delinquent loans were somewhere in the foreclosure process, though the lender hadn't yet acquired the property. The figures don't include home-equity loans and other second mortgages
Moreover, there were 217,000 loans in July where the borrower hadn't made a payment in at least a year but the lender hadn't begun the foreclosure process. In other words, 17% of home mortgages that are at least 12 months overdue aren't in foreclosure, up from 8% a year earlier."
RealtyTrac which compiles mortgage delinquency data reports "the number of delinquent mortgages has grown to 3.2 million and an estimated 7 million foreclosures loom in the next two to three years."
EMPTY HOUSES
USA Today says there are about 14 million vacant houses, apartments, and condos in the United States. According to USA Today 1 in every 9 homes sits vacant. Some sources say the figures are higher. NEGATIVE EQUITY FirstAmerican Core Logic, a real-estate data firm reports that more than11 million families owe more on their home than it is worth That's a quarter of all families with mortgages.
In California, one fifth of mortgage holders are more than 25% underwater. That's the case also in Florida, where one third of mortgage holders are similarly underwater. In Nevada 1 out of every 2 mortgage holders are 25% underwater.
