COMMENTARY | If we are really in the midst of a housing recovery, I'd like to know why the home across the street from me and others like it are still vacant.
What's more disturbing is the fact that there haven't been "for sale" signs on any of these abandoned properties for the past four years. Banks appear to be holding onto many of the foreclosures to keep inventory low.
According to an article by The New York Times, there are signs of a turn in housing after years of false hopes.
I'm still skeptical of a housing rebound living in my fairly new subdivision in the Tampa, Florida area. Many of the newer subdivisions got hit the hardest by the housing bubble. Some people bought new construction homes as we did at the top of the bubble. When they realized they couldn't afford the high mortgage payments, they eventually went into foreclosure.
The fact that the value of homes started to plummet gave people no incentive to hold onto their properties. My family has been affected because we lost close to $100,000 of our net worth since our house value fell off a cliff.
So what are these signs of a true housing recovery?
Bidding wars have begun
Yes, the bidding wars have begun on many Florida homes because of the low inventory. But I still believe inventory is low only because banks are holding back inventory. When I go for a walk, I can count numerous homes that are banked-owned properties. As a homeowner, I rather see the homes be put up for sale or rented out. Every year that passes means a home infested with rodents and exposed to the elements.
It's a terrible waste since these homes are only 7 years old.
Hitting the bottom
I'm not sure how experts can tell when we have hit the housing bottom. I know a friend purchased a short sale for $94,000 last December. Now an almost identical home sold for $104,000 as a short sale. Perhaps my friend really did buy at the bottom. The sign for me that we had hit a bottom was when you could buy a condo or house for the price of a new car.
Buying new construction
When it comes to new construction homes in Florida, I think it's a completely different animal compared to resale homes. If builders even smell the least bit of desperation on the part of home buyers, they immediately increase prices. Reality is, though, I've noticed builders in Florida still offering major discounts on inventory they are hoping to unload so they can move to their next development.
Rising rents and low rates
Certainly, the low interest rates should entice anyone who is sitting on the fence to become a home owner. In fact, I'm encouraging another friend to move to Florida so she can take advantage of the low prices as well as historically low interest rates. It's definitely a time to buy. Meanwhile, the cost of renting is higher than I've ever personally seen.
So, is the housing recovery in Florida a hoax? I think it is. Until banks put the rest of the foreclosures up for sale, I don't think we can fairly asses the real estate market. So many people are selling their homes as short sales, which means property values will stay low for possibly years to come. It's good for the buyers, but bad for the ones who want to sell and move.
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