The number of foreclosures continues to decline throughout the country. Reports from the Mortgage Banker’s Association, RealtyTrac, and other sources are showing a steady decline in both new foreclosure filings and the number of properties in the foreclosure process. The data mirrors our local information as we watch the local foreclosure count declining. In fact, Florida seems to be ahead of the process somewhat compared to the rest of the country.
Locally, the number of foreclosures has declined as a trailing indicator of several factors:
First, the demand in the market seems to be increasing. As demand increases it becomes easier to find buyers for properties before they get into foreclosure. In addition, properties that have already been foreclosed on are selling very rapidly.
Second, prices have stabilized. As prices slow or stop their rapid decent it becomes easier for sellers to find buyers at prices that still offer equity.
Third, banks have become more receptive to short sales. Where short sales were very difficult to process a few years ago, often taking over a year, today they are somewhat common. The procedures that complete a short sale have become more common place and understood by sellers, buyers, Realtors, banks, and title companies. If properties can be sold short before they are foreclosed upon, foreclosures decline.
Lastly, banks have realized that a short sale is a more profitable option than a foreclosure. When a bank forecloses on a property it can be a long and expensive process. When they are finalize the foreclosure they are left with a property that often has deferred maintenance, tax and insurance liability, and other expenses (home owner’s associations, condo association, etc.). A short sale or a loan modification can eliminate some of those costs.
Ultimately, the foreclosure data that we’ve seen is a sign of the drastic improvements that we’ve seen in the market over the past year. The signs continue to point the way to improvement in the Daytona Beach Area, Florida, and hopefully the Country as a whole.
September 15th, 2011 at 10:50 am
[...] There has been loads of discussion recently, including articles in the newspaper with regards to the number of foreclosures and distressed sales in the Greater Daytona Beach Area. The local MLS records over 3,000 sales in the first eight months of 2011. During that time there has been a relative consistent improvement in the absolute number of sales as the year has progressed. That data is consistent with information that shows that the number of sales transactions has continued to increase since 2008. Broken down by month, it appears as though the number of homes sold by banks has decreased in general, while the number of short sales and traditional sales has increased. This is inline with a prediction we made in May of this year regarding the trend of foreclosures vs. short sales. [...]