Local housing market slow, but improving
Pallavi Agarwal | Highlands TodaySEBRING - Here is the good news: More homes are selling in Highlands County and are taking less time to sell.
Published: November 16, 2012
Published: November 16, 2012
The bad news: prices this year have declined a bit compared to last year, lenders have become tougher so it's taking longer to close on a home, and new home construction, which is what creates jobs, is almost non-existent in the county.
Despite all that, as Highlands County heads into the new year, Realtors are looking at 2013 with optimism.
The much-smaller local market is not seeing the seller's market that places like Miami and Orlando are witnessing as their demand outstrips supply, but things are slowly picking up, said CJ Hamel, with RE/MAX Realty Plus.
Pending home sales are up by 52.6 percent over last year, she said, although the number of closed sales is down a little because it's taking longer, up to 60 to 90 days in some cases, to close.
In 2011, the county had a 12.3-month supply of inventory on the market. Today, it's 7.6 months.
"We are definitely heading in the right direction," Hamel felt. "The prices have stabilized. Everything here has leveled out."
MIDFLORIDA Real Estate Sales Inc.'s Jim Turvey agrees.
"The market is definitely improving," he said. "And it has been steadily improving as we clear out the backlog of foreclosed properties."
But nobody is expecting a miracle in 2013.
Hamel hopes to see a 2-3 percent increase in prices next year, which is "better than seeing a 2-3 percent decline."
Foreclosed property sales artificially depress home prices because lenders want to get rid of them and sell them far below market value, which affects the value of homes in their neighborhood.
Foreclosed properties are often abandoned and may end up becoming eyesores and fixer-uppers.
Locally, foreclosed properties are still in circulation, and may be for some time, but Hamel said lenders have become more open to negotiating with homeowners on the less bruising short sales, where they agree to let the property sell for less than what is owed on it.
Not everyone qualifies for a short sale. "You have to have a hardship," Hamel explained, from a job loss to health issues or because you are relocating. These days, Hamel said, lenders are even paying homeowners money to negotiate a short sale, from $12,000 to $15,000, if they are relocating.
Lenders prefer short sales over foreclosures because they lose less money.
Short sales also put a smaller dent in home prices because while they typically sell 5 to 10 percent lower than the market value, their asking price is higher than a bank-owned property and the properties may be in a better condition.
These foreclosures, those filed and those pending, still hang over the market, and may decide if the prices go up, remain the same or decline.
How lenders will release their foreclosure inventories now that 49 states have signed agreements with five major lenders after the robo-signing controversy remains to be seen, said Steve Berkowitz, CEO of Realtor.com operator, Move, Inc.
The fear is this shadow inventory will flood the market and bring down prices with it.
"By all indications, the 2012 housing market is unfolding as we expected, and we're encouraged with the progress local markets are making,' he said.
"However, much will depend on the continued health of our economy, specifically job rates, and how lenders will release their foreclosure inventories," he added. "All of these key factors will determine how quickly our local housing markets recover and remain healthy."
Highlands County Clerk of Courts numbers show about 700 total foreclosures filed year to date until September. There was a spike in March, which saw 104 filings, and July, which followed closely behind at 102.
A RealtyTrac report shows that one in every 312 Florida homes received a foreclosure filing in October - either an initial notice of foreclosure, auction notice or final bank takeover. Nationally, one in every 706 homes received a foreclosure filing last month.
Florida kept the top ranking even as its new foreclosure filings dipped 19 percent compared to last year. New filings were up 2 percent last month from September.
"The Florida overall numbers were still at a 12-month high," RealtyTrac Vice President Daren Blomquist told the Palm Beach Post. "It's pretty much status quo. The upward trend is continuing, but the numbers may be starting to plateau."