According to Mary Kane of the Washington Independent (4/2/09), the foreclosure moratorium has been lifted by Fannie Mae and Freddie Mac. Originally the act was supposed to keep families in their homes over the holidays. However, when a long solution was sought the act was extended for three months.
It is predicted that the volume of REO properties will increase in the 2nd and 3rd quarter of 2009, however those facing foreclosure have other alternatives to saving their homes, i.e. mortgage modification. If the lender and the homeowner cannot come to an understanding the seller still has the option of trying to sell his home as a “short sale”. If the foreclosure process isn’t too far along the seller will probably be successful. However, if an auction date has already been set the seller has little recourse.
Sellers who are not involved in a pre-foreclosure or a short sale have taken the advice of their Realtors and adjusted their list price so they can compete with them. This is where it gets interesting for the buyers who do not have the patience to wait to find out if their offer on a short sale will be accepted.
Statistics do not lie. The sales of existing single-family homes surged in South Florida last month; 101 percent increase in Miami-Dade and a 47% increase in Broward. Low interest rates, declining prices and the first time home buyer tax credit seems to be the perfect combination. The Florida Association of Realtors released information that states both counties enjoyed growth since last year for the past eight months.
Foreclosures and short sales will continue to put downward pressure on the market until inventory stablizes. However, if the pace of home sales continues at this rate it won’t be long until the inventory begins to decline and we all know what happens then!