Increased Short Sales Make Appraisals More Difficult
Increased Short Sales Make Appraisals More Difficult
Good news for the South Florida housing market is making headlines almost every day, and there's certainly reason to be optimistic about changing market conditions. Finally, the playing field has leveled for buyers and sellers, and bidding wars are becoming increasingly common. Yet, the market still hasn't reached important milestones experts believe are crucial to the market's full recovery. Among the biggest problems that the South Florida housing market still needs to overcome is inaccurate appraisals, which are becoming more prevalent as short sales flood the market.
In the wake of the housing crisis, the federal government instituted new guidelines designed to prevent mortgage fraud and develop more accurate appraisals. Yet, the issue of inaccurate appraisals continues to plague the market. In part, this is because the large number of short sales and foreclosures on the market have skewed pricing to the point that it's hard to figure out the value of a standard property sale. Though, this problem might not last for long since investors are quickly scooping up the distressed properties on the market in bulk purchases.
Another key to a full Florida housing recovery is an increase in lending. Many buyers ruined their credit during the housing crisis when they were forced into foreclosure, and while they're renting, they aren't putting any new money back into the housing economy. Lenders are also making it more difficult to get a loan since they learned their lesson about the consequences of lending money to people who aren't financially stable. In order for the market to reach a recovery, however, experts say that underwriters will need to be more forgiving on debt-to-income ratios so it's easier for all Florida residents to make a housing purchase.
The unemployment rate in Broward County also needs to improve in order for the housing market to get back on its feet. Right now, the nationwide unemployment numbers are making some progress, but Palm Beach County's unemployment of 9.6% exceeds both state and national averages. If the unemployment rate in South Florida starts to make significant improvements, then more residents will feel financially capable of buying their first home. Right now, the precarious job market has made many Florida residents opt for rental properties since they also don’t come along with the risks associated with home ownership. Perhaps most importantly, Floridians aren’t going to feel comfortable with investing until they are both employed and making strides toward improving their credit scores.
Our team of experts in Palm Beach real estate is eager to give you the information you need about the South Florida housing market and short sales and foreclosures. Please contact us if you’d like to find out more about the advantages of buying a Palm Beach home!
[cc_author style="double-or" author="gia"]