The Equity Crises in Orlando’s Housing Market

The Equity Crises in Orlando’s Housing Market

January 11, 2014 by · Leave a Comment 

Orlando Homes UnderwaterThe housing market in Orlando saw it’s fair share of positive trends during 2013. Home values have made big strides in returning to their historical averages, but it’s not been all positive. The Orlando area also had one of the largest concentrations of underwater properties in the country.

Nearly 36 percent of homes in the four counties that comprise the Orlando metro area are buried in home loans exceeding the present home value by 25 percent or more. The rate of underwater residential properties in Orlando outpaced the statewide number of 34 percent.

(Investor Fact: The highest rate of financially troubled properties was 38 percent which was reported for the state of Nevada.)

The Long Road to Financial Stability

Over the last year, the average prices for homes throughout the Orlando metro area increased by nearly 28 percent! This has certainly helped build equity for homeowners– but many of them still have a long climb to become financially stable.

Just remember that this is only one side of the coin. There is a significant percentage of homeowners who are equity-rich. Reports show that it is nearing a point where more and more will be expected to list their Orlando home for sale. This is expected to provide a nice boost for the Central Florida housing market during this year.

Florida Housing Recovery Driven by Foreign Investors

Florida Housing Recovery Driven by Foreign Investors

September 22, 2013 by · Leave a Comment 

Florida Leads Nation in All Cash SalesFor potential home buyers like Nicole Kenaston, their dreams of owning a residence in Florida are being crushed. But what could be the issue? Kenaston, a 32 year old government employee claims that she has bid on no less than 5 houses over the last three years, but she keeps losing out to overseas investors who are willing to pay in cash. “I’ll find a place I like and can get financing for, and the all-cash buyers will come in and pay above market for it,” explains Kenaston. “It’s heartbreaking.”

Since the housing market recession started turning around, foreign investment in Florida real estate has been booming based on reports from the National Association of Realtors. International buyers, which accounted for 7.3 percent of statewide residential sales by dollar amount in 2007, accounted for 19 percent in the 12 months prior to June 2012 (the most recent data available).

Florida’s Market Ripe for International Investors

During this data period, Florida represented 25 percent of all U.S. residential property sales to international buyers. According to Peter Zalewski, owner of Condo Vultures, a Miami-based brokerage and consulting firm, the market seems reminiscent of 2003 or the early days of the housing market boom in South Florida.

Guide to Buying Home Foreclosures

March 20, 2010 by · Leave a Comment 

Whether you're a relocating family or an investor looking to make money flipping homes, Central Florida foreclosures deserve your attention…especially the homes in Downtown Orlando. Buying a foreclosed home will afford you the freedom to make lovely interior adjustments, colorful landscaping upgrades, and a variety of other property embellishments.

What is a Foreclosure? A foreclosure occurs when a homeowner is unable to pay their mortgage. Because of this delinquency, the mortgage lender (bank) assumes full ownership of the home. This bank-owned home is referred to as a "foreclosed home".

If you are considering buying a foreclosed home in Central Florida, examine the following:

•    Understand the Advantages: Lenders want to recover the unpaid amount of the home's mortgage as soon as possible. As a result, many foreclosed homes are sold at significantly discounted prices. Sometimes, a foreclosed homes will sell for 30-40% of its market worth.

•    Inspect the Property: Some foreclosures are left in a state of disrepair. This is not necessarily a bad thing. Just make sure that the cost of the repairs will be be overshadowed by the value that they will add to the home.

Understanding Bank Owned Homes

June 25, 2009 by · 1 Comment 

If you are looking to invest in any real estate, it is important to fully understand the options that are available. A bank owned property is not usually one you will make a killing on. Here are some simple facts that will help you understand bank owned homes.

How Does a Foreclosure become an REO

A real estate owned (REO) property is one that returns to the lender after a wasted attempt to sell it at a foreclosure auction. Most foreclosure auctions do not end in the purchase of a home. The reason for this is simple. If there was sufficient equity in the home to satisfy the loan, the homeowner most likely would have sold it and paid off the bank, avoiding the foreclosure in the first place. A property generally only ends up in foreclosure when the owner owes more than the property is worth and is unable to keep up with the payments. Foreclosure is the final option.
Foreclosure auctions start with a minimum bid amount that covers the balance of the loan, accrued interest, legal fees, plus any costs associated with the foreclosure itself. To qualify as a potential bidder at a foreclosure auction, you’ll need to have a cashier’s check that will cover the entire bid amount. If you are the winning bidder, you agree to take the property ‘as is’, which may include current tenants or property liens.
Since the amount owed to the bank is usually more than what the property is actually worth, very few foreclosure auctions turn out successfully. The property then returns to the bank and becomes an REO or ‘real estate owned’ property.

The Big Benefit of Short Sales

June 19, 2009 by · Leave a Comment 

With Florida foreclosures still at record levels, many sellers, eager to cut their losses and get a fresh start are considering a short sale as a viable option. So what exactly is a short sale and who can benefit from one?

Who Benefits from the Deal?

Realistically, the seller, lender and the new investor can all benefit from taking part in a short sale. The seller avoids foreclosure while the buyer obtains the property at a reduced rate.

The lender also benefits because they look at the short sale as a way to avoid the burden and extra cost incurred when dealing with a foreclosure. With so many homes on the market right now, a short sale makes sense to the lender. The deal is wrapped up quickly and the home never sits vacant, becoming a monthly loss for the bank.

For a short sale to occur, the seller initiates the deal by contacting the lender who then agrees to accept a price that is lower than the amount owed on the property. If this occurs, the seller is typically forgiven the remainder of the loan and they don’t carry the blemish of a foreclosure on their credit record.  A short sale will affect the seller’s credit to some degree, but isn’t considered as serious as a foreclosure.

Real Estate Owned (REO) Properties

June 15, 2009 by · 1 Comment 

A home that has gone through foreclosure process but was not purchased during the foreclosure auction, reverts back to the bank. It then is known as a real estate owned property, or REO.

Although these homes typically don’t involve incredible savings, there are distinct advantages to purchasing a real estate owned property. Here is a list of REO benefits:
•    The property is free from tax or other property liens. Once the bank owns the property, it does all the proper negotiations to free the home from all claims against it.
•    REO homes are usually vacant. The bank has already gone through the eviction process, which takes that responsibility off of you.
•    Foreclosures may need extensive repairs. REOs have usually been through the fixing up stage as well which makes it ready to move into or resell.
•    If repairs do need to be made, the bank will make allowances for this by reflecting it in the selling price.
•    During times when the market is slow, an REO can often be picked up at a discounted price.
•    Lenders will generally accept less money down when you are purchasing an REO property. They will often pay the closing costs as well.