As I hear people all around me jumping for joy saying, ‘The recession is over!” “We are picking up steam and the worst is behind us.” I have to think they’re not seeing the entire picture. Recently, traffic has picked back up, restaurants are busier, and there’s a lot more real estate selling in SW Florida, compared to 2009. So it’s pretty easy to see that our economy is much better off this year, in some respects.
I’ve lived here for over 7 years and I am a Realtor. I’ve seen a lot of ups and downs. I’m on the street everyday which gives me an opportunity to speak to real people, not just evaluate statistics. I see our market as two sided. On one hand, there are buyers everywhere; people are coming out of the woodwork. Maybe they couldn’t afford a place previously, but now they can. Investors are coming back into our market and buying up good deals. On the other hand, there are people I talk to that say they have been hanging on, but can’t do it any longer and they are walking away from their house or attempting a short sale. It’s a mesh of promising optimism and unfortunate decline.
Having said that, I’ve always been a numbers guy and that’s why I’m not too quick to jump on the “Recession is Over Bandwagon.” First, the bad numbers. According to RealtyTrac, throughout the USA, foreclosure filings in March totaled 367,056, which is a jump of nearly 19 percent from February and up almost 8 percent from March 2009. Lenders repossessed nearly 260,000 properties in the first quarter – a record for any quarter, and a 35 percent increase from a year earlier.
Specifically in SW Florida, according to SunshineMLS, in the first quarter of 2009 there were 200 homes that sold as REO (bank-owned properties) compared to the first quarter of 2010 which had 579 REO properties close. In other words, we have seen almost a 200% increase in REO properties that have been listed for sale and purchased by another buyer in our local market. In 2009, 1 in 139 homes were in foreclosure in Collier County with an unemployment rate at 12.6%. In Lee County 1 in 92 houses went into foreclosure with an unemployment rate of 13.9%. The downside is the upward trend of foreclosures, but the upside is that buyers are snapping up those well-priced homes.
So, is it getting better or worse? I feel like we are entering a cleansing phase of the cycle, where we will see more and more foreclosures coming to market. This is a necessary step in the path to recovery. If we can allow the market to purge itself of the distressed properties, then we will pave the way for future growth and true value appreciation. Hang tight, we will get there!
Sources for this article : www.floridarealtors.org; www.sunshinemls.com; www.npr.org; www.realtytrac.com.