Lousy home sales played a small role in the market across South Florida last year. However, it helped normalize the local housing industry while at the same time putting more pressure on home-buyers searching for distressed properties. John Tucillo, chief economist explained that the days of bargain house shopping for real estate is a thing of the past.
Distraught home and condo sales have been dwindling over the past couple of years. When we look at the entire state of Florida, nearly half of all sales involved either short sales or foreclosures back in 2009, nearing the climax of the housing fiasco. Back then, the properties mainly sold for below market value to any and every buyers.
With home prices rising over the past year or so, this has turned many areas of South Florida into a prime seller's market. Short sales and foreclosure are now selling for their listed price, and often selling above market value.
Now the hundreds of home-owners who were previously upside down on their mortgages, suddenly have equity. They don't have to let their homes go into foreclosure or even need permission from their lenders to sell for less than they owe.
A South Florida attorney has indicated some of his clients are now postponing short sales- and some are even waiting until the housing market improves so they can avoid huge tax bills since the Mortgage Forgiveness Debt Relief Act expired this year. The amount of debt forgiven in the short sale of a residence could be considered income by the IRS and therefore taxable.