Florida Short Sales Up 32 per cent from Last Year
Florida Short Sales Up 32 per cent from Last Year
At the height of the housing crisis, it almost went without saying that South Florida borrowers who defaulted on their mortgages would face imminent foreclosure. Now that the housing market is making a steady recovery, that's no longer the case. South Florida borrowers are following the national trend of opting for short sales rather than foreclosures, and the number of short sales granted before banks initiated foreclosures is on the rise. According to the latest statistics released by RealtyTrac, short sales in Florida have increased by 32% year-over-year.
Palm Beach County is a leader in the housing market turnaround statewide. According to the statistics, short sales where the owner was not in foreclosure increased by a whopping 49% over the last year. The decline in foreclosure activity is a strong signal that the housing recovery will continue to boost Palm Beach real estate values well into the next year. Home values are already making steady upward progress, and the upswing in buyer demand is also contributing to escalating home prices.
In part, however, the trend toward short sales is on account of the fact that new federal programs have been released in an effort to help underwater home owners retain ownership of their properties. Many Florida residents were able to take advantage of the National Mortgage Settlement, and the short sale transactions are finally becoming a streamlined process. Lenders are expediting the process in an effort to comply with new federal guidelines, and home owners are eager to take advantage of short sales since they are much less damaging to credit scores than foreclosures.
According to the new tax guidelines that were poised to go into effect as of January 1, 2013, home owners who sell their homes in short sales would have been required to report that money as taxable income, however, Congress worked through the New Year and extended the Mortgage Debt Relief Act 2007 through 2014. As a result of the year-end uncertainty, many local real estate agents were reporting an upswing in inquiries from home owners interested in short sales before the end of the year. With uncertainty that the tax break would be extended, however, some borrowers who are already struggling with their mortgage payments have been hesitant to take a chance on the possibility of having to pay additional taxes and fees. That uncertainty has now been removed following the extension of the Mortgage Debt Relief Act.
The Palm Beach County short sale trends are mirroring housing trends nationwide. Now, distressed short sales outnumber bank-owned sales, and lenders are starting to grant short sales much more readily than in the past. The influx of distressed properties on the Palm Beach housing market has helped to offset the dramatic shortage of housing inventory currently available. However, as competition heats up for Palm Beach short sales, prices are on the rise. Short sales are no longer selling at prices well below that of traditional sales; in fact, the discount gap is quickly diminishing as demand for homes continues to outpace the supply.
If you'd like to find out more about the Palm Beach housing market or Palm Beach short sale trends, please give us a call. We'd love to show you around the community while you search for your future Palm Beach home.
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