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When the foreclosure challenge first came out, we used to hear about the four sand states all the time. California, Arizona, Nevada and Florida. Well those are not the states now that have the largest foreclosure situation. Now Florida is still a judicial state so they’re still in that group. But now states like New Jersey, Illinois, New York, Maine, Connecticut, Ohio, Indiana, those are the states with the highest foreclosure inventory. So it’s shifting. Where the problems were and where they’re going to are different groups, two different regions of the country.

We want you to understand that in the judicial states there’s a back up of inventory. And that goes across the board. As Freddie Mac just announced, although our servicers have resumed the foreclosure process in most area, we believe the volume of our single-family REO acquisitions during the first quarter of 2012 was less than it otherwise would have been due to delays in the foreclosure process, particularly in states that require a judicial process. If you’re in one of the judicial states you have a larger inventory of foreclosure properties that will be coming to market. That means your prices will be impacted the most. – Courtesy of KCM Crew

Michele Herndon

813-523-9222

micheleherndon@me.com

http://www.TampaAndBeyond.com

http://www.ApolloBeachLuxuryHomes.com

Here’s a map showing all the judicial states versus the non-judicial states. Now the interesting this is, if you take the judicial states, there’s only two exceptions. If we take the top 50 percent of the states that have the most foreclosure inventory they’re all judicial states – or all the judicial states are in the top 50 percent except for two. Kansas and North Dakota are not in the top 50 percent of the the top 25 states. Every other judicial state was in the top 25.

As a matter of fact in the top 10, the only non-judicial state in the top 10 is Nevada and the reason that is, is because last October they put in a state law that slowed things up, made foreclosure without filling out the paperwork properly a felony. You can go to jail for it. That slowed up the foreclosure process in Nevada over the last six months. But every other state in the top 10 are judicial states meaning they have the biggest foreclosure inventory because they didn’t release it to the market over the last couple of years. Not at the same pace as the other states did. That pacing is going to change right now.

The inventory of homes in foreclosure, in judicial foreclosure states, is growing but this increase is being more than offset by declining inventories in non-judicial states, where the processing timelines to declare a foreclosure are shorter. Nationally the inventory of homes in foreclosure decreased 0.1% from what it was a year ago at this time. What does that mean? What we’re going to hear is that you know what? The foreclosure situation is kind of the same way it was last year. And that’s going to be accurate. But the state’s it’s impacting is going to change dramatically. – Courtesy of KCM Crew

Michele Herndon

813-523-9222

micheleherndon@me.com

http://www.TampaAndBeyond.com

http://www.ApolloBeachLuxuryHomes.com

The nation’s divided up into two different categories of states, judicial states and non-judicial states. You need to know the difference between those two and here’s why. Here’s a graph showing why. Because the foreclosure inventory in judicial states is 2.5 times greater than the foreclosure inventory in the non-judicial states. The national average is 4.14 percent of all mortgages on a foreclosure inventory. Well in non-judicial states it is much less than that, in judicial states it’s much greater. So let’s define judicial versus non-judicial.

The non-judicial states allowed banks to go ahead and foreclose on houses without bringing it through intense legal process, without going through a court system process. And in those states they were clearing the inventory, the foreclosure inventory, for the last couple of years. In the judicial states that court system, that court system process, not only delayed, but in some cases absolutely stopped foreclosures form coming to market. In the state of New York for example, the average number of days a person is in a house after he makes a payment, the average number of days is 1019.

There in the house almost three years without making a mortgage payment. That’s because the court system is giving the banks difficulties as far as how to foreclose on that house. The judicial states now they were the most impacted by robo-signing. Those are the states where the banks were waiting for a clear list of instructions on how to go ahead and foreclose. They got the list, the instructions, the guidelines. So in those judicial states that backed up the inventory it was all backed up and didn’t come to market. That inventory has to be released right now and those will be the areas that will have the biggest impact. The distressed properties are the biggest impact on prices because that’s where most of the distressed inventory will come out. – Courtesy of KCM Crew

Michele Herndon

813-523-9222

micheleherndon@me.com

http://www.TampaAndBeyond.com

http://www.ApolloBeachLuxuryHomes.com

Over a year now as seen in photo 1, we can see that the percentage is actually gown and over the last couple of months it’s called pretty significantly. Each month I will present this slide and continue it for eternity, on percentages of distressed sales, so we can use it as a point of comparison.

We can see the percentage of distressed property sales have actually fallen rather significantly as seen in photo 2.  There are people reporting there’s less distressed sales, there’s less distressed properties for sale. That’s true short term because the banks are working on getting those properties to market. These numbers are going to jump back up over 30 percent and I think that’s going to happen relatively soon. And when those numbers jump up it’s going to mean more sales. I’m not as afraid that it’s going to have a major impact on pricing because the demand is up. In some parts of the market it will, but overall it’s not going to have a gigantic effect like the first wave of foreclosures a couple of years ago did. – Courtesy of KCM Crew

Michele Herndon

813-523-9222

MicheleHerndon@me.com

http://www.TampaAndBeyond.com

http://www.ApolloBeachLuxuryHomes.com

Have you ever had a client become one of your friends? That’s what happened to me when I started showing rental properties to Mr. & Mrs. N. – parents of a military family relocating to Florida. They wanted to rent before jumping into purchasing a home. We found them a home that met their criteria with a  year-long lease. Fast forward one year… we are both busy but stayed in touch (calls, neighborhood events, etc.). We would catch up on life, children and of course, real estate. Now, their plans had solidified to stay in the area. We had a short timeframe, as the owners of their current residence were preparing to move back into the home in TWO MONTHS! We got them pre-qualified with a special Jumbo Veteran’s Administration loan – did you even know that loan existed? They debated between two properties and decided to put a contract on one. Unfortunately, that short sale deal fell through. THEY LOST IT AND WE HAD LITTLE TIME TO SPARE! We immediately put together an aggressive offer on number two – (which was really their number one dream home all along in their hearts but it was a stretch)… ACCEPTED!

Financing was approved, and we closed with enough time for them to move in and prepare their new home for a huge military retirement party for Mr. N. I am so glad I stayed in touch, lead them to the right lender that helped with their VA loan, and worked closely with the listing agent. Now, this family (my friends!) lives in their dream home. Out of all the people YOU know, who is the next person who is military and being reassigned, or retiring from the military, or perhaps currently renting and ready to buy? While thinking of them, please call me at 813-523-9222. I can help them too! I am here to help!

Michele Herndon

813-523-9222

micheleherndon@me.com

Radar Logic took a very strong position on this on their last monthly report. Here’s a quote from their report. “As long as distressed homes remain a significant portion of homes for sale, prices for non-distressed homes will be under pressure to converge with distressed prices. Considering the significant price discounts in distressed sales relative to non-distressed sales, non-distressed prices could have quite a bit further to fall.” So, Radar Logic, took a very strong stance that we will still have downward pressure on homes because of the shadow inventory that’s now beginning to be placed onto the market. – Courtesy of KCM Crew

Michele Herndon

813-523-9222

micheleherndon@me.com

The month’s inventory of homes for sale is starting to pick up a little bit. Why is that? Well it’s pretty simple. We said that was going to take place. There’s two different sources that are going to continue to feed the supply side. Number one there’s been a pent up selling demand. There are sellers who haven’t been able to sell the house over the last couple of years that are now going to put it on the market and move.

They come from a lot of different places. Number one, move-up buyers that have a house to sell, they’re looking at it and saying well wait a second. Now with the interest rates where they are, if I’m going to move up to a bigger house, now’s time to do that. Some of the people where we talked about that age group of 18-34 that are now going to be purchasing houses, 84% of them, we have to realize that of that 84% some of them are going to be moving out go their parents house freeing the parents up to do what they need to do with the rest of their lives. Some of those houses are going to come on the market.

So, we’re seeing a slight uptick now. I don’t think that’s going to drive up because again he demand is there. If we were where we were the last time some distressed properties were dumped onto the market and where demand was falling a couple of years back, this would be a crisis situation almost. But with the increase in the demand we have, I think we’re going to be able to gobble up a lot of those homes. – Courtesy of KCM Crew

Michele Herndon

813-523-9222

micheleherndon@me.com

There was a study done by CB and psychotherapist Dr. Robi Ludwig where they showed the importance of home ownership. And they did a study on it.  This is what Dr. Ludwig said. “We’re seeing a psychological shift. Instead of looking at homes through the eyes of an economist, we’re realizing that a home doesn’t solely equate to a financial return. Instead the home is the emotional center of our lives. And it remains a critical component of who we are. The feeling you get when you step through your front door or pull into your driveway is indescribable and priceless. And the same holds true for our children who crave stability.” – Courtesy of KCM Crew

Michele Herndon

813-523-9222

micheleherndon@me.com

A homebuyer poll released recently by TD Bank revealed aspirations of home ownership are still very much alive.  The majority 84 percent of today’s younger renter generation, ages 18 to 34, responded that they intended to buy a home. Eight-four percent of the people between the ages of 18 to 34 that are now renting plan to buy a home. Now in previous additions we even let you at KCM we’ve let you know that the number of people between the ages of, slightly different age group, 25 to 34 – that age group – that right now there are 5.9 million people living with their parents in that age group. Back in 2003, nine years ago, that number was 4 million. There has been 50 percent increase in that number. That’s an anomaly. That anomaly’s going to correct itself. – KCM Crew

Michele Herndon

813-523-9222

micheleherndon@me.com

Here’s a chart done again for Reuters, Felix Salmon put this out. In the chart the red line shows the mortgage payment you’d have to make if you took out an expanded 30-year mortgage for the median asking sales price for the vacant sale units. So if you were going to buy one of the vacant units out there, the median sales price that’s what the red line represents. That number is now lower than the median national rental price. This is the first time this has happened since 1988 and probably for quite some time before that too.

So they did the numbers all the way back to January 1988. And as you can see rental prices in this country for the most part kept on ticking upward. That was the national trend.  Mortgage payments, because it’s based on interest rate and price, peaked as prices went through the roof and then came flying down as this bubble burst. But right now that red line is below the blue line.  It’s cheaper now to go ahead and buy a house than it is to rent a house. – Courtesy of KCM Crew

Michele Herndon

813-523-9222

micheleherndon@me.com