Foreclosure Slowdown: A Boon for Home Sellers


SARASOTA, FLORIDA, March 11th, 2016 – Encouraging for homeowners thinking of selling their residences, some industry analysts expect that recent uptick in prices of pre-owned homes for sale in Sarasota and Manatee is sustainable and won’t be affected much by low-priced foreclosed properties entering the market.

This expectation is based on the conventional thinking in the housing industry that the selling activity on foreclosed or distressed homes significantly below fair market or median home value force down prices for traditional sales. Recent market data, however, indicate that current activity on foreclosures has reached the level that it is no longer creating much impact on home pricing.

Distressed home market retreats

Foreclosure Slowdown: A Boon for Home Sellers

Reflecting similar price upswings in Sarasota, the median price for single family homes for sale in Manatee hit a five-year high of $274,900 in January 2016, up 10 percent from a year earlier. Notably, sales of foreclosed single family homes in the county have already retreated significantly, dropping by more than one-third for all of 2015, totaling 827 for a 34.3 percent drop from 2014.

There was a downswing in short sale of single family homes in Manatee for 2015 too which totaled 155, down nearly 47 percent from the previous year. Deals on distressed Sarasota homes for sale showed similar drops in double digits for all of 2015. For this January, the median price for single family homes in Sarasota rose 5.1 percent to $247,000.

Foreclosure Inventory Ebbs

Coupled with an improving economy, the escalating home values as seen in these price gains is likewise benefitting underwater homeowners and thus helping reduce foreclosure inventory further. At end-2015, the foreclosure rate amongst all outstanding mortgages dropped to 1.84 percent in the Sarasota-Manatee region from the 3.1 percent recorded a year-earlier by data provider CoreLogic.

In a separate assessment, RealtyTrac reported that foreclosure filings in the two counties dropped to an eight-year low in 2015. According to the real estate research firm, foreclosure proceedings filed in Sarasota and Manatee last year totaled 5,721 or one in every 76 homes for a 1.3 percent rate. The total for last year compares with the peak of 20,509 foreclosure cases filed in 2009.

Gems for Bargain Hunters

While declining steadily, foreclosures in the two counties, as in all of Florida, remain above market norms. Hence, there still could be clusters of foreclosed properties or bank-owned residences in some communities or neighborhoods. These foreclosures could still conceivably impact upon home appraisal values on the hyperlocal level but, on the other hand, provide gems of a find for searchers of low-priced REOs amongst Manatee and Sarasota homes for sale.

A pair of these delights for bargain hunters is amongst the new listings of Sarasota homes in the gated community of Arielle on Palmer Ranch. Listed just this February, both feature floor plans of 1,554 square feet designed with two bedrooms and priced in the $200s.

Two other fresh choices indexed in the MLS of Sarasota homes for sale as foreclosures are in the well-established community of South Gate. One has a floor area of 3,184 square feet, featuring four bedrooms and offered in the $200s. The other is as affordably priced in the mid-$100s but smaller at a two-bedroom layout within a floor area 1,821 square feet.