The soaring rate of foreclosures ….
The soaring rate of foreclosures
According to analysts at Zillow.com, during the month of December 28% of the homes that sold nationally, sold at a loss. Here in Florida, 47% of the homes sold at a loss during the same month.
The soaring rate of foreclosures within the state of Florida is leading to lower home prices. Just in Florida alone, 500,000 homes received some form of foreclosure notice during 2009. According to Ken Johnson, a real estate economist as well as a professor at the Florida International University, “This is the market clearing, it’s bad medicine and we either swallow it a little at a time or a lot at a time. This is a lot.”
The Zillow.com Home Value Index also showed that by the end of December 2009, nearly 41% of mortgage owners in South Florida were “underwater” on their mortgages, that is to say they owe more than what the home is worth. This shows a small improvement from the third quarter statistics that revealed “underwater” mortgages at 46%.
Will the Rise in Home Prices Continue
During the fourth quarter of 2009, home prices rose in over 40% of the cities nationwide! According to the National Association of Realtors (NAR), the median sales price for previously occupied homes was $172,900 by the end of December.
The surge in home sales is believed to be mostly contributed to the federal tax credit for first time homebuyers. The $8,000 tax credit was scheduled to expire on November 30, 2009, however the federal government extended and expanded the program to continue until the spring of this year.
Two things are concerning economists:
1. Will the huge backlog of foreclosures turn the home prices downward once they hit the market?
2. Will the slightly visible recovery in the real estate market make a U-Turn once the FED pulls back support?
Only time will tell…
Tags: Citrus County, Citrus County News
