Tampa Bay home sales keep rising, but foreclosures remain a drag

Tampa Bay area home sales rose 21 percent in June compared with a year earlier, but at least one Tampa Bay area housing analyst complained that banks are harming the housing market by unfairly dumping foreclosure homes.

The Florida Association of Realtors said sales improved to 2,848 in June from 2,346 in June 2008. That continues a happy trend of rising sales that started last September. The peak for June home sales was 5,230 in 2005.

Local home prices have been holding more or less steady since they bottomed at $121,000 in January, but still are down 22 percent from a year earlier. June’s median sales price was $139,400.

Prices would be higher were it not for banks pouring cheap foreclosure homes onto the market at about half price, said Peter Murphy, president of Tampa’s Home Encounter.

Home Encounter said distressed sales - both foreclosures and pre-foreclosures - constituted 37 percent of sales in June.

Murphy accused banks of prolonging the housing slump. He said the federal bank bailout perversely encouraged banks to sell homes at any price since the government was covering their losses.

“Lenders – not homeowners – have become the most powerful force in the US housing market,” Murphy said. “Yet rather than learning a lesson from the housing boom and acting in a responsible fashion, lenders are now selling homes at prices so low that they’re single-handedly leading the decline in home values in Tampa Bay.”

Nevertheless, the sheer volume of cut-rate distressed properties is driving the sales turnaround. Realtors also cited the $8,000 first-time home buyer federal tax credit that expires at the end of the year.

Tampa-St. Petersburg-Clearwater isn’t alone. Home sales gained in all of Florida’s 19 major markets except Gainesville, Sarasota-Bradenton and Tallahassee. Improvements were concentrated in hard-hit housing markets like Cape Coral-Fort Myers, where the average home changes hands for less than $88,000.

The cheapness of many homes is causing problems in some quarters. Lawrence Yun, chief economist for the National Association of Realtors, said poor appraisals tied to distressed property sales are killing deals.

“Poor appraisals are stalling transactions,” Yun said. “The big question is how much the appraisal issue will impact the ability of contracts to go to closing.”

Comments

[Frank Lee]

It was recently reported that the distressed sales mix was in the neighborhood of 50%. Going down to 37%, while still not healthy, is certainly headed in the right direction.

[SoldierRenter]

How's the high end inventory going? I'm watching homes in the 350-450 (upper middle, not high end) and it looks like inventory is climbing. Also, how will the collapse of CRE affect the residential market?

[thompson]

What is a poor appraisal? I bet it is one that doesn't make the sales price.
Ask Mr Yun, if his realtors completely fill out the MLS forms ( as to room count,concessions,is this a short sale or preforeclosure, complete descriptions, etc). Most listing sheets are totally incomplete. Does he know, that if realtors complete their paperwork, that it may help in the production of a better appraisal. Appraisers use the MLS as a major source of information.

[Ronnie]

Banks are not dumping their properties. If anything, they are holding them back. I don't think this is a plan by banks to keep from flooding the market. I think they are just inefficient when it comes to getting rid of REO’s. They have never been good at it.

I have bid on a number of properties and banks are kidding themselves on what they want for some of these properties given their condition. I can’t tell you how many houses that I have put offers on that were rejected only to be sold months later for considerably less than my offer. There is not doubt that the longer they hold them the more money they lose.

[Ronnie]

Banks are not dumping their properties. If anything, they are holding them back. I don't think this is a plan by banks to keep from flooding the market. I think they are just inefficient when it comes to getting rid of REO’s. They have never been good at it.

I have bid on a number of properties and banks are kidding themselves on what they want for some of these properties given their condition. I can’t tell you how many houses that I have put offers on that were rejected only to be sold months later for considerably less than my offer. There is not doubt that the longer they hold them the more money they lose.

[Fuzzy Bear]

"Lawrence Yun, chief economist for the National Association of Realtors, said poor appraisals tied to distressed property sales are killing deals."

These are not poor appraisals, but simply a fact that the NAR and others in the industry can no longer influence the appraisal process that helped cause this mess.

[ALBIT CABAN]

Is a fairly documented fact that demand is up due to falling house prices, the first-time buyer tax credit, and low mortgage rates ¯ the average 30-year rate was 4.86% in June. A situation emerging are the poor appraisals which delay transactions.
In order to maximize the potential for a housing recovery and subsequent economic recovery, we need realistic appraisals that are based on proper comparisons and done by a local specialist. It is still a reliability issue.

[Frank Lee]

"What is a poor appraisal?"

A poor appraisal is one that fails to use *truly* like comparables.

Distressed properties may not be *like* the subject. This would vary from neighborhood to neighborhood. The seller may not be in a like distressed scenario, and there may no longer be distressed comps available in the same locale.

How would you feel if Joe Appraiser used the only foreclosure in your subdivision as a basis for your evaluation?

[Paradigm Shift]

"How would you feel if Joe Appraiser used the only foreclosure in your subdivision as a basis for your evaluation?"

I guess the answer depends on if 'you' were buying or selling.. ;)

If there were 20 houses listed in your neighborhood all built by the same builder and similar floorplans.. and you were the only house that was not a short or foreclosure.. what's the fair market value of your house? After the 19 other houses get off the market the demand for your house goes back up and so does the price $$$.

[Frank Lee]

PShift - that was iterated by "This would vary from neighborhood to neighborhood."

We went through this...

http://blogs.tampabay.com/realestate/2009/06/caseshiller-index-more-evidence-for-tampa-home-price-stabilization.html?cid=6a00d83451b05569e2011571de825c970b#comment-6a00d83451b05569e2011571de825c970b

[Paradigm Shift]

Home sales study shows where asking prices are close

http://www2.tbo.com/content/2009/jul/27/home-sales-study-shows-where-asking-prices-are-clo/news-breaking/

[Frank Lee]

Just checked the Hillsborough Public Records...

*Effective filings are down again - albeit slightly - for the 4th straight month. While new filings are the same teensy percentage higher than last month, the ever-rising tide of releases is keeping the effective rate from increasing.

Again, is the current level healthy? Absolutely not. The reductions are merely a hopeful sign of a slow recovery.

http://pubrec3.hillsclerk.com/oncore/Search.aspx

April = 2,703
May = 2,272
June = 2,024
July = 2,010

There are currently est. 550 sales on the docket as of 5:45am this morning.

ftp://www.hillsclerk.com/civil/foreclosure_list/MortgageForeclosureSales.pdf