Tallahassee Fl – The national 25Billion Mortgage Settlement was approved, which was brought on by federal official and 49 state attorneys general, including Florida, against the top five largest servicer – Bank of America, Citigroup, JP Morgan Chase, Wells Fargo and Ally financial.
What will this mean for the Tallahassee Market? Lenders can now proceed in a faster pace in foreclosure and we have seen a rise in foreclosure filing in March. This means we will get flooded with more foreclosure and short sales resulting in a higher inventory.
We have already seen in March an increase of home inventory. The demand for homes is being steady and therefore the price pressure on homes on the market will move home prices downward.
Many foreclosure and REO properties are listed as shadow inventory (properties not entered the market yet) and have not entered the market yet. In the first quarter 2012 nation wide we have moved to an expected shadow inventory of 47 month with an estimated 371 billion in seriously delinquent homes of 90 days late compared to a 40 month shadow inventory in the fourth quarter of 2011.
Additional price pressure comes from mortgage lenders who remain cautious in terms of credit quality, down payments, and valuations. As of Ellie Mae reporting the average credit score approved and closed was 750 with a loan to value (LTV) ratio of 76%.
The Tallahassee market is still struggling but the good news are lenders favor Short Sales over Foreclosure. Short Sale approval have picked up and going faster than before. But also Foreclosure filings have picked up and it is unlikely that distressed sales will decline in the Tallahassee market.
The good news for the Tallahassee market is that we see investors coming back into the market while home prices are historically low. Home prices are back at the year 2000/ 2001 price level. Many of the investors are cash buyers.
However homes with flaws and not priced correct remaining longer active in the market. It is important for this sellers to understand today’s market. Home seller who bought the house years ago and who want to sell the house today will not have the same value and equity today.
Buying and selling in this market request a deep understanding of the history and pressure in each area of Tallahassee and prices.
We hope that this Tallahassee market report gives you a better understanding and useful information to make an educated decision with your real estate transaction.
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