Tampa Bay home sales don't match Florida's 34% boost in Sept.

By James Thorner, St. Petersburg Times Staff Writer - Saturday, October 24, 2009

Florida home sales rose 34 percent in September compared with a year earlier, but Tampa Bay didn't share in that upsurge.

Tampa Bay Realtors reported a year-over-year sales increase of only 11 percent, far below sales spurts of 41 percent in Orlando and 42 percent in Sarasota.

Tampa Bay's underperformance left Realtors scurrying for answers. Earlier in the year, economists predicted the Nov. 30 deadline to use an $8,000 first-time home buyer tax credit would rev up sales in late summer and fall.

About 2,410 homes sold in September in Pinellas, Pasco, Hillsborough and Hernando counties. A year earlier, 2,174 homes changed hands.

Pinellas single-family home sales matched the state average, but the bay area's performance was dragged down by below-average activity in the other counties. But even Pinellas buyers were growing scarcer in September.

"We've heard appraisals didn't come in, banks dragged their feet too long and buyers got tired of waiting as reasons for the decline," the Pinellas Realtor Organization's Ann Guiberson said in a statement.

She could be channeling St. Petersburg Realtor Frank Malowany.
A specialist in the sale of million-dollar homes with Smith & Associates Real Estate, he grits his teeth as banks reject seven-figure, all-cash purchase offers for waterfront mansions facing foreclosure. What's worse, banks can take three to six months to decide.

"Nothing's smooth. If you're dying in a bed with cancer maybe they'll talk to you. Even then it's hard," Malowany said. "And we're talking cash buyers."

Nationally, home sales rose 9.2 percent from a year earlier, an increase that won guarded praise from the National Association of Realtors.

"Much of the momentum is from people responding to the first-time buyer tax credit, which is freeing many sellers to make a trade and buy another home," said Lawrence Yun, economist with the national Realtor group.

Contrary to what Yun said, economists reported this week that the credit hasn't had a desired ripple effect by stimulating move-up home purchases.

Contrary to what Yun said, economists reported this week that the credit hasn't had a desired ripple effect by stimulating move-up home purchases.

Tampa Bay's median home price dipped nearly 5 percent from August to September, from $144,600 to $137,800. But prices have floated in a narrow range on both sides of $140,000 for most of this year, leading some to call a home price bottom.

A gathering of housing industry economists in Washington this week predicted that national home prices — as well as those in Tampa Bay — would drop a bit further as another wave of foreclosure homes enters the market over the next six to eight months.

Robert Denk, a forecaster with the National Association of Home Builders, rated Florida as one of the most overbuilt markets in the country and described a "long road back to normal."

Even September home prices might not tell buyers and sellers what's happening on the ground today, said Amy Crews Cutts, economist with government-backed mortgage lender Freddie Mac.

That's because people who closed on homes in September probably signed purchase contracts in July and August. That makes it hard, in a declining market, to know what a home's worth in October, she said.

If there has been one area of improvement, it has been in the number of surplus homes on the market.The inventory of homes for sale in and around Tampa — 14,433 — declined to its lowest level since spring 2006. In Pinellas, about 12,773 homes were listed for sale in September, down 36 percent from the 20,053 homes for sale a year earlier.

"We still have over 6,000 single-family listings on the market, when 3,000 to 4,000 would indicate a more balanced market as we had from 2001 through 2003," Guiberson said.

‘Underwater’ homeowners lead Sept. foreclosures

By DUANE MARSTELLER - dmarsteller@ bradenton.com

MANATEE — Most Manatee County homeowners who fell into foreclosure last month were financially “under water,” property and court records show.
Two out of every three owed more on their property than what it is worth, according to a Bradenton Herald analysis of property tax records and September foreclosure filings. The average deficit was $72,098.

The Herald’s findings didn’t surprise foreclosure experts, who said Monday that most Florida homeowners have been financially swamped by free-falling home values.

“I would have estimated it as closer to 100 percent,” said Shari Olefson, a Fort Lauderdale foreclosure attorney and author of “Foreclosure Nation: Mortgaging the American Dream.”

The average underwater homeowner in Manatee who was hit with a foreclosure suit in September owed $282,268 on a home valued at $210,170, the Herald’s analysis showed.

In the most extreme case, a bank claims a Michigan couple owes nearly $2.05 million on a Lakewood Ranch Country Club home that’s valued at $1.45 million. And it’s not just single-family homes: The owner of a Bradenton apartment complex valued at nearly $12.1 million is nearly $18.6 million in arrears, according to the lender seeking to foreclose on the property.

Two federal foreclosure-prevention programs have done little to help Florida homeowners because of the eligibility criteria, Olefson said.

With the average underwater homeowner in Manatee owing 134 percent of their home’s value, many don’t qualify for a refinancing program because it’s limited to 125 percent. Federal officials initially estimated as many as 5 million U.S. homeowners could benefit, but only 20,000 loans have been refinanced thus far, according to the Treasury department.

“Most of our properties are more than 25 percent underwater, so refinancing is out of the question for them,” Olefson said.

Another program requires mortgage modifications to cost homeowners no more than 38 percent of their income for the mortgage, taxes and insurance. “That option’s not available for many because our taxes and insurance are so high in Florida,” Olefson said.

The Herald’s analysis was based on each foreclosure case’s “estimate sheet” — the lender or servicer’s calculation of how much the borrower owes — and the subject property’s 2008 market value as determined by the Manatee County Property Appraiser’s Office. The number of underwater homeowners likely is higher, as home prices have fallen further since the property appraiser’s office calculated those values.

Lenders and servicers filed 534 mortgage foreclosure suits in Manatee County Circuit Court in September, eight more than they did in August. They have filed 4,829 such suits through the first nine months of 2009, or 16.5 percent ahead of last year’s record-setting pace.

More than 75 percent of September filings were against homesteaded properties, the highest percentage since the foreclosure surge began in late 2006. Among neighborhoods, Bayshore Gardens had the most foreclosure filings with 11, followed by Greenbrook Village with nine and Greyhawk Landing with eight.

The Case of the Missing REO Inventory

Rick Sharga - Realtytrac - October 7th, 2009

Certain things in life are simply meant to be mysteries. There are age-old philosophical questions that have kept philosophers busy for millennia: What is the sound of one hand clapping? If a tree falls in the forest and no one is there, does it still make a sound? Other mysteries hang heavy with intrigue: What really happened to Amelia Earhart? And who really kidnapped the Lindbergh baby? And still others simply defy logic: If Denny’s is open 24 hours a day, 365 days a year, why are there locks on the doors?

Now we can add another question to the list of ongoing mysteries: With foreclosure activity breaking records nearly every month, where are all the REOs?It’s a fair question. In normal market situations, a bank will repossess a home and usually process it through to a listing agent to put on the MLS within 30 days.

In a relatively short period of time, virtually every marketable REO property finds itself listed for sale on the local MLS. Today, that’s simply not the case; it’s likely that between 450,000 and 500,000 properties repossessed over the past year are still not on the market. And with buyers hungry for housing bargains, and agents and brokers champing at the bit ready to sell the properties, it begs for a reasonable answer.

Lenders and servicers admit that it’s taking longer to process REOs than it has in the past, and they offer a number of legitimate reasons:

-Many of the properties have title issues that need to be resolved
-Many of the properties are in states of utter disrepair
-A number of states have strict redemption rights periods, which prevents the lender from reselling the property
-A few states have extended the length of eviction proceedings
-The sheer volume of REO activity has created a “pig in the python” phenomena, (to put this in perspective, there will be roughly four times the number of REOs this year as in the last “normal” year, 2005)

What else could be slowing things down? A popular theory is that many banks are holding the properties off the market in order to defer losses. There is some accounting logic to this theory, as in most cases banks aren’t required to adjust asset prices until the actual resale of the property.

Another idea is that the industry is holding back the inventory to create leverage with the government in order to force the creation of a “toxic bank” or RTC-like entity that would buy the distressed assets at 50 to 60 cents on the dollar rather than the 30 to 35 cents available on the market today.

This theory suggests that, seeing the threat of a massive inventory of distressed homes being released all at once, the government would “blink” rather than risk another housing market meltdown.

Whatever the reason — process issues or conspiracies — we’re going to continue to see record-breaking numbers of REOs for at least the next year, and will all be watching to see when these sought-after homes finally make their way to the market.