Real Estate market

The real estate market, at least in Northwest Florida, continues it's downward slide. The numbers are in for August Sales in this area and they reflect a 2% decrease in average sales price. I believe we will see this trend continuing at least until Spring and there are a lot of reasons for this pessimism.

The stock market continues to have more downs than ups, and a lot of that turbulence is due, at least in part, to the real estate market woes. The real estate market affect the whole financial well-being of the nation and until it easess, more of the same is in store for us.

Adding to or more correctly, partly causing declining prices in real estate is the mortgage situation. More of those sub-prime ARMS of the last few years are coming due. And they are creating more foreclosures as mortgagors cannot re-finance those loans with fixed rate loans at reasonable rates. Why? Because at the higher rates, most cannot qualify. In a lot of cases, that leaves people with one option: Hand the keys to the mortgagee, and walk away. Not the best solution, but a lot of people in this situation feel that is their only option.

Those falling behind in their payments are also turning to their mortgagees and working out what is called a short sale. That means they owe more than the house is worth, so sale proceeds will be short by some amount. The lender then becomes part of the decision on accepting or rejecting offers. And that complicates the sales process, so many potential buyers shy away from such transactions. Thus these properties tend to stay on the market longer, adding to the seller's problems even more.

So, the market is still down, and continuing downward. But is isn't dead. Not by a long shot. Realistically priced property still sells. More sellers are realizing that the excesses of the past are gone. Indeed prices are falling, and will do so until the market corrects itself. Where is that point? No one knows yet. Most realistic sellers are reducing prices to find that point for their property. That's the point where the property sells.

Until next time,

Broker Bob