You might have assumed this article would be about short sales on the market today, but that is not the case.
You see, the real estate market is about to experience a surge of homebuyers who took part in short sales as sellers three to five years ago.
That’s right, there is a wave of buyers who will steadily hit the market now and for the next five years that will push the housing market back up to historically “normal” levels and beyond, making 2014 a good year to finally sell your home.
If you caught our recent article on 3 key concerns that could negatively impact the real estate market in 2014, then consider this article the counter argument about why past short sales will be an undeniable force in the Tallahassee real estate market for years to come.
Short Sales Are A Recent Phenomenon
I have been a real estate agent in Tallahassee since 1991, and I will confess to never having heard the term “short sale” until 2006. That means I was a real estate professional in Tallahassee for 15 years and never used the term short sale. Why?
Because even when my company was selling more than 800 homes per year, it was a very rare event to help a seller negotiate a home sale with a bank where the funds from closing were not sufficient to cover the loans on the property. But oh how times have changed.
It is important that you understand the significance of what the real estate graph above is reporting. Consider these five pieces of information and the conclusion we should draw:
- Basically, short sales were hardly performed (and never reported) prior to 2009.
- Beginning in 2009, there has been a relatively large group of people undergoing short sales.
- People who do short sales used to have good credit and they owned their own home.
- People who do short sales will want to own a home again.
- People who do short sales typically have to wait about 4 years before they can get another home loan.
Therefore, I believe the average penalty period for short sellers will end up being four to five years. This means that 2009 and 2010 short sellers are buying now and will impact the demand of homes for sale in Tallahassee.
Short Sales By The Numbers
What this really means is that until now, the majority of past short sellers could not buy again and the 2014 market will be the first year in which these past owners will be streaming into the Tallahassee real estate market. How significant could this be?
There were just over 3,000 home sales recorded in the Tallahassee MLS last year. There are more than 300 past short sellers from 2009 and 2010 that will be eligible to buy homes this year, meaning an increase in the buyer pool of 10% over last year.
When you combine this group with the growing demand from other channels, it is hard to argue against a thriving real estate market in Tallahassee.
So if you are thinking of selling a home in Tallahassee in 2014, please drop me a note and we will schedule a time to evaluate your home and let you know what you can expect to gain from a sale.