It seems that we were never lacking for additional nuisances in real estate during 2010. Throughout the year we experienced a number of unprecedented events that had a significant impact on our local real estate market. And, as we enter 2011 the stage is set for another defining year.
The Conclusion of the Buyer Tax Rebate
As of April 30th of 2010 the Tax Rebate ended for all but military personnel. This routinely modified attempt by our government to intervene in the free market system was marred by variations to the program, to include rebate amounts, whether it was to be repaid or not, and starts and stops that seemed to have no rhyme or reason, and delays in qualified recipients receiving the rebates.
We did however see prices on homes increase slightly as would be buyers rushed to go under contract before April 30th. However it was not without a price, overwhelmed lenders could not complete the loans in time to meet the June 30th deadline to close, so the deadline was extended until September 30th 2010. This set the stage for fraud to occur as reports surfaced of contracts occurring after the April 3oth deadline.
Record Number of Foreclosures
2010 was year that our nation saw more than a 1,000,000 foreclosure hit the market. At one time foreclosures made up approximately 40% of all sales. We also saw the cumulative effect of the foreclosure crisis resulting in home values, declining an average of 25% over the last three years. 2011 is forecast to produce more foreclosures that 2010; with approximately,250,000 properties being foreclosed. The result may be a double dip in sales prices and declining values. In light of this 2011 should also bring out many would be purchasers who have been trying to time the market; hoping to capitalize on continuing historically low interest rates and a true bottoming of prices. After 2011 we should see a decrease in the number of foreclosures hitting the market and as a result increasing sales prices and values.
Robo Signers for Foreclosure Proceedings
2010 also revealed how overwhelming the sheer volume of foreclosure is on our nation’s lenders and mortgage servicers. Faced with mounting case of defaulted loans and the need to work them through the foreclose process; which by the way differs from state to sate, many lenders failed to execute the foreclosure process according to the rights and responsibilities set forth in the notes and security deeds, and according to individual requirements of each state. Much of this was also a result of the way mortgages are traded, serviced and hypothesized in the open Market.
2011 should result lenders paying closer attention to all governing documents and statutes, as they experience an increasing number of law suits resulting from their mechanized approach to processing foreclosures.
Record Low Interest Rates
2011 from all indications and from those far more equipped than I to forecast interest rate trends, seems to suggest that we will enjoy historically low interest rates for a while longer, but not forever. This coupled with a bottoming of prices should be the catalyst for many waiting buyers to make buying decisions this year.
Increasing Number of Short Sales
2011 will also a year that we will see an increasing number of Short Sales hitting the market. On the surface this seems like a bad thing, but it may have some positive effects. First Short Sales are often time occupied by the owner, which means that the house has not sat empty for moths while a foreclosure is processed. It may also mean that the property because the owner continues to live in it may be in much better condition than a foreclosure. Often times this will result in a higher sales prices that a foreclosure would yield; thereby reducing the number of homes that sell at foreclosure prices.
Van Purser is a licensed real estate broker in Georgia. Since1981 he has successfully purchased and renovated over 400 homes. His expertise is in the area of foreclosures, rehabs and fixer uppers. Additionally, he has represented hundreds of clients over the years as a broker with Metro Brokers, RE/Max and now with his own firm. He and his wife, Jeanne, who is also a broker, have been married since 1977. Van can be reached at 770-623-3313 or by email VanPurser@VanPurser.com