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Pinellas County Home Foreclosure Filings Spike as Prices and Sales Level Off

Whether it was the anticipation of the foreclosure settlement or simply because lenders must eventually move their distressed inventory, initial foreclosure filings in Pinellas County rose sharply in December and January.  This follows the huge drop in filings after the disclosure of the robo-signing scandal in 2010.

Much has been made about the real estate shadow inventory and its effect on home prices.  As a real estate appraiser, my prior analysis showed a distinct link between the available inventory and home values.

With 717 initial real estate foreclosure filings in Pinellas County in January as compared to roughly 400 per month this past summer we could be seeing the beginning of an increased supply of foreclosed homes.  Of course with the Florida foreclosure timeline over 800 days what really matters to the inventory is the number of properties that have made it through the foreclosure process and made it onto the real estate market.  While there does not appear to be an increase in REO (real estate owned) properties recently listed, if lenders have become more aggressive foreclosing on properties, we would expect it to show up first in the number of initial filings.

The number of home sales continues to edge upward with a very slight increase over last January.  As the real estate market continues to work off the overhead of distressed homes, a more rapid resolution to the shadow inventory is necessary for a healthy housing market.  2012 maybe the year that the housing market takes a big step toward normalcy and could provide the last best opportunity to snap up properties at historic bargains.

As the premier provider of real estate appraisals and property valuations in the Tampa Bay area, Marsh Bilby and Asset Value Appraisal and Consulting assists banks, mortgage companies, Attorneys, Realtors, loss mitigators and home owners with a complete line of real estate appraisal and valuation products.

Market Bottom or Beginning of Final Leg Down

In my last newsletter I discussed the sharp drop in available housing inventory and how it has been leading to an increase in the average sale price of residential properties.  The chart below is of Pinellas County and reiterates this fact.  Year over year the total number of sales has increased 16% while the current inventory of homes has decreased almost 42%. The result has been a modest increase in prices of 3.5%.  As depicted in the chart below, the pace of declining inventory and increasing sale price has accelerated in the last six months.  Since the low in February 2011 the average sale price in Pinellas County has increased 22%.  Is this the sign that the housing market has recovered or is there something else at play?

August 2011 Average Sale Price and Current Inventory

It is pretty obvious that the decline in inventory has led directly to this increase, but what about the “Shadow Inventory” we hear so much about?  (more…)