Is it true that the best deals out there are the foreclosures and short sales? This is one of the most frequently asked questions by home buyers.
There is this stigma that Florida possesses as it pertains to distressed properties and many home buyers think that foreclosures and short sales are as abundant as they were two years ago. Home buyers think that good deals come from buying distressed property, but as we’ve come to discover, the numbers don’t lie and this isn’t necessarily the case.
In order to fully grasp the housing market regarding foreclosures, we must understand the broad details of the housing climate. For our example we focus on Sarasota County, with data compiled from the Florida MLS and the Sarasota Association of Realtors.
- The inventory of available properties in Sarasota for June 2013 was 3,114 (the lowest point in 10 years and 18% lower than June 2012)
- Median prices were 12% higher in June 2013 compared to June 2012
- The number of distressed properties (foreclosures and short sales) represented 23% of overall sales in June 2013, compared to representing 51% of overall sales in the fourth quarter of 2010
The reason for this? The number of distressed properties on the market has declined and the prices of these properties has leveled out in relation to the standard, non-distressed properties that are available. Additionally, banks have been holding onto these properties longer, often renting them until prices start to increase.
As the real estate market in Florida, and specifically, Sarasota, has made a tremendous comeback in the past couple of years, the available inventory levels have declined. Consequently, as supply decreases, demand increases, and this drives up prices. As prices have started climbing up, many investors and home buyers looking for a good deal snatched up the properties that were in fact, good deals. The foreclosures that are on the market are generating significant interest and it is now common for a distressed property to have multiple offers, especially on aggressively priced listings.
To illustrate just how competitive the market place has become, Suncoasteam recently represented a buyer who made an offer on a foreclosed property listed in the mid-200s. The property had been on the market for less than two weeks and at the time the offer was made, there were eight other offers on the property.
A decline in distressed properties is certainly a sign of a healthy market. We are quickly moving towards an equilibrium in the market and that is why many people don’t know whether to call this a “buyers” or a “sellers” market. The days of “foreclosure hunting” and finding a “bargain” are fading fast. We’re in the waning phase of finding a bargained distressed property, and these properties may not be as great of a deal as many think.
To conduct your own search or to see available listings, click here to for Sarasota FL real estate for sale. For more information, to ask a question, to discuss your real estate needs, or to schedule an appointment to view property, please contact Jim Mulligan, REALTOR, 941-235-7474 or firstname.lastname@example.org.