A Tidal Wave Of Foreclosure Activity
February 12th, 2009 categories: Coconut Grove Real Estate, What is selling in Coconut Grove?
Similar to last year, January was a very slow month for Coconut Grove real estate. The number of closed sales in any given month is really indicative of the amount of activity in the previous 2 months because it takes 4-8 weeks for a property to close. Combine Thanksgiving, the holidays and the economic crisis, and you should not be surprised that we ended up with only 3 single family closed sales in January (there were 4 closed sales in January of 2008).
A very alarming trend is that 6 of the 8 of the pending sales this year have been distressed properties. 5 of them were foreclosures, and 1 was a short sale.
January 2009 Single Family Closed Sales:
- 1735 Fairhaven Place | List Price $1,425,000 | Sale Price: $1,250,000 | Sold For Land Value | Corner Canal Lot | Not a Foreclosure or Short Sale
- 2520 Swanson Avenue | List Price $650,000 | Sale Price: $565,000 | 1,860 Square Feet LA | 7,722 Lot | 3 Beds/2 Bath | Not a Foreclosure or Short Sale
- 3521 Crystal View Court | List Price: $599,000 | Sale Price: $530,000 | 1,555 Square Feet LA | 5,600 Lot | 3 Beds/2 Bath | This was a Short Sale
2009 Pending Sales To Date:
- 4231 Justison Court | List Price: $899,000 | 4,254 Square Feet LA | 9,980 Lot | 4 Beds/4 Bath | This is a foreclosure.
- 3625 Battersea Road | List Price: $799,900 | 3,078 Square Feet LA | 10,500 Lot | 5 Beds/3 Bath | This is not a short sale or foreclosure
- 1809 Micanopy Avenue | List Price: $799,000 | 3,127 Square Feet LA | 6,750 Lot | 4 Beds/3.5 Bath | This is not a short sale or foreclosure.
- 1835 Opechee Drive | List Price: $625,000 | 3,359 Square Feet LA | 14,150 Lot | 7 Beds/5 Baths | This is a foreclosure and word on the street is that after being on the market only 1 day and having 10 offers presented, the bank accepted one that was rumored to be $200,000 over list price. See more about this property here.
- 3661 North Prospect Drive | List Price: $578,650 | 2,218 Square Feet LA | 11,270 Lot | 3 Beds/2 Baths | This is a foreclosure.
- 1750 Tigertail Avenue | List Price: $569,900 | 3,249 Square Feet LA | 3 Beds/2 Baths | This is a foreclosure.
- 3699 Loquat Avenue | List Price: $320,000 | 2,052 Square Feet LA | 3,932 Lot | 3 Beds/3 Baths | This is a foreclosure.
- 4180 Pomona Avenue | List Price: $300,000 | No Square Footage or Lot Size listed | This is a short sale.
You will see that only one of the closed and pending sales this year have been over $1,000,000. This might have something to do with the high down payment requirements for Jumbo Loans (over $417,000), see yesterday’s post.
Click here to read more about what is selling in Coconut Grove real estate.
Re: “A very alarming trend is that 6 of the 8 of the pending sales this year have been distressed properties. 5 of them were foreclosures, and 1 was a short sale.”
This shouldn’t be alarming at all! IMO, it’s a necessary step to clearing inventory. If you believe as I do, the market rarely lies, why would anyone buy at non-foreclosure prices? It should be obvious, that many properties aren’t on the market because the owners know the market will not support their price. Foreclosed properties are bringing down the entire market! When the number of foreclosures decline and finally clear we have a chance to resume some appreciation in the market. That is, if we’ve learned our lesson that home values and family incomes are linked!
Snowball,
I was surprised to see those numbers because we have always seen buyers willing to pay a premium for move in ready homes in Coconut Grove – even in this depressed market. The homes that have gone to foreclosure are far from move in ready, and as a matter of fact, I have yet to see a house that was in foreclosure that did not need more than $100,000 of work. Not everybody is interested in renovating a home when they move in.
As of yet, foreclosed properties have had NO BEARING on appraisels for other properties in Coconut Grove. However, I do agree that if this trend continues, and it very well may, it will start to set new prices.
Regards,
Riley
Riley,
Re: “As of yet, foreclosed properties have had NO BEARING on appraisels for other properties in Coconut Grove. However, I do agree that if this trend continues, and it very well may, it will start to set new prices.”
IMO appraisers have been behind the curve for years! The trend will most certainly continue and the “bailout” will help little, or not at all. When asset values are not supported by sufficient income only three things can restore financial health. Either incomes must increase,(unlikely), asset values must decline (likely) or a combination must occur (most likely).
While lowering mortgage interest rates will be stimulative, it will not be market driven and adds additional risk to any buyer. What happens if mortgage rates rise after you’ve bought? Even a 1% increase means 10-15% of additional mortgage payment to the next buyer.
Snowball