Downtown Sarasota Condominium Short Sales and Foreclosures.
The inventory of short sale and bank-owned listings has become almost insignificant compared to the total downtown Sarasota condo inventory. As of the end of August 2011, there were just 13 short sales listed (click here to see them) for sale downtown. This compares with 49 listed for sale in August 2009 and 32 in 2010. New short sale listings so far this year have totaled 29 compared to 39 during the same 8 months in 2010. The thirst for distressed inventory, however, continues to be robust as sales this year have totaled 35 compared with just 26 last year.
The bank-owned (foreclosure) market downtown has been fast turning with low inventories for the past 2 years. At the end of August there were 4 bank-owned condos downtown listed for sale (click here to see them) compared with 7 in August 2010 and 5 in August 2009. New bank owned listings have slowed to just 14 so far this year compared with 20 during the same 8 months last year.
Sales of bank owned inventory slipped to just 9 condos so far this year down from 14 in the same period last year. The drop in sales is a reflection of the reduced availability of inventory.
The reduction of distressed inventory and new distressed listings is a national trend. The sky-is-still-falling crowd says that there is more in the pipeline. You will read unsubstantiated reports of as many as another 3 million more homes to go (we have averaged about 1 million foreclosures per year over the past 3 years, so this equates to another 3 years of gloom and doom). The leap is made from the slowdown in the foreclosure process to this huge number. Seldom is any real math sited – just hyperbole.
Another ugly stat given as a reason for more foreclosures is that 25% of homes are under water (worth less than the note used to finance the home). This figure had held steady since seemingly the beginning of the bust. I don’t see how anyone could extrapolate any sort of future foreclosure number from this stat.
And none of these factors fully explains the sharp reduction in short sale inventory. It also isn’t showing up in the S&P/Experian Consumer Credit Default Indices, which have improved to pre-bust levels with virtually no mention by anyone (new first mortgage default levels are back to 2007, second mortgage back to 2006). How can foreclosures keep growing if defaults are shrinking?