ORLANDO, Fla. – April 17, 2009 – After more than a year of free-falling sales and prices, Central Florida’s battered housing market is getting support from both first-time home buyers and investors taking advantage of record foreclosures and distress sales across the region.
With mortgage-interest rates at record lows and an $8,000 tax credit for buyers who haven’t owned a home for at least the past three years, existing-home sales in the region have started rising again compared with a year ago. And half the deals involve bank-owned foreclosures or “short sales” – properties for which the bank has agreed to take less than the amount owed on the mortgage.
Who’s buying them? Anecdotal reports and a few surveys indicate that first-time home buyers, who don’t have to worry about selling an existing property, and investors venturing into the second-home market for the first time or searching for bargains to add to their inventory, are responsible for most of the sales.
Bulk auctions of both homes and condominiums are creating buzz in the local market, and bankers are saying yes more often to short sales, which spare them the expense of a full-blown foreclosure.
“Lenders are becoming more responsive,” said Patrick Higgins, an Orlando-area Realtor, though he noted that the short-sale process still remains slower and more cumbersome than a regular, open-market sale between a willing seller and a qualified buyer.
“Agents are learning the system,” he said, and now can shave as much as two months off the typical six- to nine-month waiting period before a short sale reaches a closing date.
Greg Clarkson, 39, is among the growing number of professional investors scouring the landscape for deals.
The Seminole County resident bought a bank-repo home in the posh Sweetwater subdivision about a year ago, made $75,000 in improvements and now lives there. He also owns five investment properties; two of them are long-term rentals, and he’s doing rehab work on the others in anticipation of selling them for a profit. He’s also eyeing a 26-unit apartment complex that he figures is a good buy right now.
“I’m taking my time, hand-picking pristine deals,” Clarkson said Wednesday while on the road looking at properties for sale.
How is he financing the acquisitions? Private investors, friends and acquaintances who share in the profits. “I’m out of pocket no money,” he said.
Breakdowns of distress-sale buyers aren’t available, but first-time buyers accounted for 65 percent of all existing-home sales nationally during the first three months of the year, up from 46 percent a year ago, according to a survey by HouseHunt Inc.
The consumer-oriented Internet company also found that certain markets and submarkets in Florida – including Orlando, Longwood, Palm Bay and the Baldwin Park section of northeast Orlando – reported the “greatest activity” from first-time buyers. Repeat buyers, meanwhile, were the more active group locally in the MetroWest section of southwest Orlando and in the nearby Bay Hill section of Orange County.
The survey also noted that 48 percent of sellers nationally are now getting multiple purchase offers for a single property, nearly double the 25 percent rate during the same period last year.
The Orlando Realtors’ foreclosure analysis, released Monday, showed for the first time the extent of distress sales in the local market. Of the 1,653 homes sold by the association’s member agents in the core Orlando market last month, 700 were bank-owned repos and another 111 were distress sales of one sort or another.
And the amount of financial duress involved in the deal greatly affected the final price: According to the Realtors’ report, bank-owned homes and condos sold for a median price of only $95,000, and other distress sales went for a median of $143,500, while “normal” properties sold for a median price of $174,995.
“This drastically shows the impact that short sales and foreclosures are having on our marketplace,” Orlando agent David Welch said this week in his real-estate blog.
Copyright © 2009 The Orlando Sentinel, Fla
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